In response to the idea of Ethereum becoming physical money, a discussion erupted, which ended up emphasizing more negative aspects of the digital currency than positive aspects. Charles Edwards, the operator of a Bitcoin investment management platform, posted a graphic comparing Ethereum and Bitcoin’s circulating supply activity and arguing that “Ethereum has joined the hard money game.” It has been less than three months since Bitcoin’s inflation rate was lower than Ethereum’s. There has been much discussion over whether cryptocurrencies will eventually overtake fiat currencies in terms of value. For Bitcoin, this is a realistic future possibility, but it is something that other digital monies can only dream about. According to Investopedia, hard money maintains a steady market value compared to actual products and services, as well as a solid exchange rate comparable to other currencies, and its applications include reduced transaction costs and hazards than those associated with other types of money.
A cryptocurrency that is considered hard money would suggest that it could not be vulnerable to arbitrary alteration in the future. In contrast to Bitcoin, Ethereum’s rules may – and have been– modified. Its supply schedule has been changed more than once, indicating that it is likely to change in the future. The burning of ETH causes it to become deflationary for a short period of time, resulting in a larger market capitalization. However, because to the fact that the Ethereum protocol and supply schedule are both flexible, the chart above does not demonstrate that the digital token can even come close to being considered real money. Furthermore, there are the unavoidable high gas prices, which are predicted to decrease dramatically by 2023 as a result of layer 2, but which are most likely not cheap enough to encourage consumer spending, commerce, and widespread use of the technology. The rates may be used to encourage people to store ETH rather than transact with it, and other controlled blockchains such as Cardano are already showing to be more cost-effective.
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