3 ms·

1) The gargantuan Chicago Mercantile Exchange says they'll start trading futures contracts on Bitcoin later this year. 2) There's a "flight to safety" quality

1) The gargantuan Chicago Mercantile Exchange says they'll start trading futures contracts on Bitcoin later this year. 2) There's a "flight to safety" quality to Bitcoin. It's proven secure in the face of 9 years of constant attacks. Ethereum is newer and not as proven yet. 3) Bitcoin has a much more powerful mining network, currently cranking 10 exahashes per second and growing fast. Ethereum is at 100 terahashes per second (about 100,000 times less), and growing slowly. 4) Bitcoin is scarce and deflationary. Ethereum is abundant and inflationary.

mrfusion 9y ago
Why is it inflationary?
- panarky 9y ago
  The bitcoin network rewards miners with 12.5 new BTC every 10 minutes or so (~1,800 per day). The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). Bitcoin's total supply is now about 17 million BTC, and will never exceed 21 million BTC. Ethereum's total supply is now about 96 million ETH with no upper limit.
  - endangered 9y ago
    > The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). This is not true. After the last hard fork, the reward for miners went down to 3 ETH.
    - panarky 9y ago
      It's a little complicated with uncles, etc., but the net result is more than 20,000 brand new ETH created every day. Here's a chart of daily block rewards. https://imgur.com/a/JG9W5 https://imgur.com/a/JG9W5
- tiki12revolt 9y ago
  because that's how it was built [1] [1] https://en.wikipedia.org/wiki/Ethereum#Ether_supply_increase_rate https://en.wikipedia.org/wiki/Ethereum#Ether_supply_increase...
iMYof 9y ago
But only (1) is a logical explanation for _recent_ price movement, no?
andrewla 9y ago
I don't think any economist would consider Ethereum's growth to be "inflationary" -- the rate of marginal increase of money supply tends to zero, just like Bitcoin's. To be considered "inflationary", it would have to increase the block reward exponentially over time, rather than just keeping it constant -- linear growth is insufficient. And all that is assuming a non-existent fixed relationship between inflation/deflation and monetary base. Note that I say "monetary base" and not "money supply" because the two are related but not equivalent. No mainstream (Keynsian) economist would really consider "monetary base" to be a critical economic indicator, and even monetarists would quibble. Only Austrians would consider it important, but they use the terms "inflation" and "deflation" to refer to money supply, so they would not consider Bitcoin deflationary either.
fishnbits 9y ago
When proof of stake comes to ethereum in a year or less, the total supply of ethereum will actually decrease very slowly over time. Bitcoin will always continue to add coins to the network, albeit in smaller amounts. Eth will subtract coins from the network.
etaty 9y ago
3) apple and orange. They are not using the same (Proof Of Work) algorithm for mining.

mrfusion 9y ago

Why is it inflationary?

panarky 9y ago
The bitcoin network rewards miners with 12.5 new BTC every 10 minutes or so (~1,800 per day). The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). Bitcoin's total supply is now about 17 million BTC, and will never exceed 21 million BTC. Ethereum's total supply is now about 96 million ETH with no upper limit.
- endangered 9y ago
  > The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). This is not true. After the last hard fork, the reward for miners went down to 3 ETH.
  - panarky 9y ago
    It's a little complicated with uncles, etc., but the net result is more than 20,000 brand new ETH created every day. Here's a chart of daily block rewards. https://imgur.com/a/JG9W5 https://imgur.com/a/JG9W5
tiki12revolt 9y ago
because that's how it was built [1] [1] https://en.wikipedia.org/wiki/Ethereum#Ether_supply_increase_rate https://en.wikipedia.org/wiki/Ethereum#Ether_supply_increase...

iMYof 9y ago

But only (1) is a logical explanation for _recent_ price movement, no?

andrewla 9y ago

I don't think any economist would consider Ethereum's growth to be "inflationary" -- the rate of marginal increase of money supply tends to zero, just like Bitcoin's. To be considered "inflationary", it would have to increase the block reward exponentially over time, rather than just keeping it constant -- linear growth is insufficient. And all that is assuming a non-existent fixed relationship between inflation/deflation and monetary base. Note that I say "monetary base" and not "money supply" because the two are related but not equivalent. No mainstream (Keynsian) economist would really consider "monetary base" to be a critical economic indicator, and even monetarists would quibble. Only Austrians would consider it important, but they use the terms "inflation" and "deflation" to refer to money supply, so they would not consider Bitcoin deflationary either.

fishnbits 9y ago

When proof of stake comes to ethereum in a year or less, the total supply of ethereum will actually decrease very slowly over time. Bitcoin will always continue to add coins to the network, albeit in smaller amounts. Eth will subtract coins from the network.

etaty 9y ago

3) apple and orange. They are not using the same (Proof Of Work) algorithm for mining.