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Ethereum: A Store of Value with Cash Flow [pdf]

ethereumcashflow.com

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Re: Ethereum: A Store of Value with Cash Flow [pdf]

#11

Post by ur-whale »

liquidify wrote: post #8
gillesjacobs wrote: post #6

I 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.

>the only major cryto with the property of fungibility

Yes agreed.

Both Bitcoins and ETH tokens can be "tainted" and that taint takes for ever to "diffuse" in the chain.

This makes some Bitcoins/ETH less valuable than others.

For example, most valuable Bitcoins are newly mined coins (they have no history), whereas a - say - Bifinex hacked Bitcoin carries a pungent smell.

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#12

Post by gillesjacobs »

liquidify wrote: post #8
gillesjacobs wrote: post #6

I 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.

I agree (an unknown amount of Monero is also a fair bit of my portfolio) but more for ideological reasons: privacy is a requirement for individual financial sovereignty. Fungibility follows privacy of course. I also think it's interesting to wait and see how the fixed tail emission supply works out.

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#14

Post by ur-whale »

lottin wrote: post #10

The 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, whi…

>they are determined by supply and demand

You are correct, but only in theory: this requires the precondition that people are rational economic actors.

In practice, people are weird, and the scarcity of supply creates a demand.

There is therefore a weird feedback loop between the supply and the demand, and scarcity alone is enough to create "value".

Examples:

    - Beanie babies

    - Magic the gathering cards

    - Pokemon cards

    - Baseball cards

    - DaVinci paintings (where anyone can have an 8k x 8k exact reproduction, but the original is worth a fortune)

    - etc...

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#16

Post by [deleted] »

liquidify wrote: post #8
gillesjacobs wrote: post #6

I 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.

[deleted]

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#17

Post by runeks »

ur-whale wrote: post #14
lottin wrote: post #10

The 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, whi…

>they are determined by supply and demand You are correct, but only in theory: this requires the precondition that people are rational economic actors. In practice, people are weird, and the scarcity of supply creates a demand. There is therefore a weird feedback loop between the supply and the demand, and scarcity alone is enough to create "value". Examples: - Beanie babies - Magic the gathering cards - Pokemon card…

> There is therefore a weird feedback loop between the supply and the demand, and scarcity alone is enough to create "value".

Yes. Temporarily. And a much less weird feedback loop is enough to annihilate all of this “value” at some later point in time (the “crash”).

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#19

Post by casi »

qertoip wrote: post #13

Ethereum is easy to change (hard forks often) and so cannot be expected to preserve any key characteristics like emission curve or even the permissionless nature. In fact, Ethereum's monetary policy did change in the past.

The policy has always been “minimal viable issuance”

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#20

Post by pjanoman »

ur-whale wrote: post #14
lottin wrote: post #10

The 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, whi…

>they are determined by supply and demand You are correct, but only in theory: this requires the precondition that people are rational economic actors. In practice, people are weird, and the scarcity of supply creates a demand. There is therefore a weird feedback loop between the supply and the demand, and scarcity alone is enough to create "value". Examples: - Beanie babies - Magic the gathering cards - Pokemon card…

Scarcity alone is definitely not enough to create value. The one piece of artwork I've made in my life is a scarce resource, but that doesn't mean I have people buying it up like its an NFT.
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