Ethereum: A Store of Value with Cash Flow [pdf]
ethereumcashflow.com
Ethereum: A Store of Value with Cash Flow [pdf]
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Re: Ethereum: A Store of Value with Cash Flow [pdf]
#2The digital scarcity argument made in the paper is weak.
And that's assuming the ETH crowd doesn't change the supply formula (which no one currently understands) on a whim.
Re: Ethereum: A Store of Value with Cash Flow [pdf]
#3You said high cash flow due to transaction fees but it's planned a reduction in transaction fees. So in next 6 years the cash flow will be lower, right?
Re: Ethereum: A Store of Value with Cash Flow [pdf]
#4The digital scarcity argument made in the paper is weak. And that's assuming the ETH crowd doesn't change the supply formula (which no one currently understands) on a whim.
If I am not mistaken, Wikipedia says that more than half of current supply of ETH was distributed among initial investors. That’s also another part of supply formula to consider.
Re: Ethereum: A Store of Value with Cash Flow [pdf]
#5The digital scarcity argument made in the paper is weak. And that's assuming the ETH crowd doesn't change the supply formula (which no one currently understands) on a whim.
If I am not mistaken, Wikipedia says that more than half of current supply of ETH was distributed among initial investors. That’s also another part of supply formula to consider.
Worth pointing out “initial investors” is anyone who sent 1 btc to the crowdfund back in 2014. It wasnt some closed off thing for vcs, anyone could participate. People just bought their tokens before the network started.
Re: Ethereum: A Store of Value with Cash Flow [pdf]
#6I don't believe Ether is a great store of value as OP claims because it has uncertain scarcity. OP neglected to mention that supply of Ether is unlimited and tends to change readily with scaling updates and is hence unpredictable.
Currently, the argument for scarcity looks good with EIP1559 where the gas fee will consist of a burned base fee and a tip to the miner resulting in overall lower fees causing a potentially deflationary supply. But Ethereum's scarcity is to a larger extends a moving target than say Bitcoin or Monero.
The other reasons for investing OP mentioned were enough for me to go deep a year ago: cash flow, network effects and developer tooling/adoption like no other L1 chain. I looked at other smart contract chain's developer resources for dapp dev and no other's come close to Ethereum. I have been learning Solidity dapp development in my free time since and can recommend the experience.
I don't think scarcity is a realistic point in the investment thesis.
Re: Ethereum: A Store of Value with Cash Flow [pdf]
#7What mostly excites me about Ethereum ist the very vibrant ecosystem of developers and builders around it. You can think of NFTs and DeFi whatever you want, the sheer amount of new applications and innovative ideas on the ethereum blockchain has been mind-boggling.
My personal favorite is Sorare, which combines NFT collectibles with fantasy soccer. And sure, right now everything suffers from high gas prices but it looks like that might be solved over the next 12 months
Re: Ethereum: A Store of Value with Cash Flow [pdf]
#8I don't believe Ether is a great store of value as OP claims because it has uncertain scarcity. OP neglected to mention that supply of Ether is unlimited and tends to change readily with scaling updates and is hence unpredictable. Currently, the argument for scarcity looks good with EIP1559 where the gas fee will consist of a burned base fee and a tip to the miner resulting in overall lower fees causing a potentially…
To be fair, I don't think you can really compare many others to Monero, which is the only major cryto with the property of fungibility. Personally I consider that property so important that if a crypto doesn't consider it a first class citizen, I don't buy much or any of the crypto.
Re: Ethereum: A Store of Value with Cash Flow [pdf]
#9It will be interesting to see if interest rates in government controlled currencies and crypto currencies will stay diverged in the long run.
Without the distorting action of governments printing money, interest rates might be set by market forces in "crypto land".
This might lead to a long term situation where artificially low interest rates are paid in government controlled currencies, but market prices are paid in crypto currencies.
Or will cheap interest rates in government controlled currencies somehow bring down the interest rates in crypto currencies?
The 10 year yield of bonds in Europe is at 0%. While US bonds are currently at 1.5%. This might be an indicator, that rates in one currency will not completely control rates in other currencies.
Re: Ethereum: A Store of Value with Cash Flow [pdf]
#10The fact that something is scarce doesn't make it a store of value. Scarce simply means is in short supply, but prices aren't determined by supply alone, they are determined by supply and demand. Moreover, if an asset is in fixed supply, then its price is determined entirely by the demand. This means such an asset will only be a store of value if the demand for the asset remains strong over a long period of time, which is something the asset issuer/producer has zero influence on.