Thread by @AdrianoFeria

1/ $ETH is MONEY, and it is more likely to become a global currency than $BTC.

Why?

🧵👇

2/Ether was created to finance the security of the network. It was designed to provide remuneration to miners (ether is used to PAY miners, and issuance is a form of subsidy). It's sole purpose is to function as a utility token, which is just a form of money that has a very

3/narrow scope. This is true for all PoW networks.

With that in mind, it is important to understand that money is not a binary attribute. It is a spectrum; Utility tokens are at one extreme end of it, and a global currency is at the other.

The interesting thing about ether is

4/that its scope as a form of money is expanding rapidly within Ethereum's digital economy. It has become the preferred asset used to facilitate economic activity involving ICOs, DAOs, DeFi, NFTs. Ether is the native currency of Ethereum (it is NOT a commodity, and never was

5/one).

There are two reasons why users chose to use ether as money:
1. It eliminates counterparty risk
2. It has good monetary properties

The market is starting to view ether as a competitor to bitcoin despite the original narrative that these were entirely different types

6/of assets. There is now an understanding that the service layer of each network is vastly different, but that both assets have excellent monetary properties. So which one will accrue value more quickly?

The value of money is determined by the same market laws as any

7/ other asset/good/service: supply and demand. Supply is in part determined by the issuance model, which is unsurprisingly referred to as monetary policy. ETH's 2.0 monetary policy + EIP-1559 will result in a diminishing total supply while at the same time reducing float due

8/to staking. It is also important to note that the switch to proof of stake uses the cost of capital (in the form of ether) to secure the network. There again, ether is being used for its monetary properties.

In addition, and perhaps even more importantly, is the fact that

9/Ethereum's economy will generate additional demand for ether because of its role as a native currency.

These factors will also promote further speculation. Accruing value through all these supply/demand dynamics will consequentially increase liquidity and stabilize

10/prices, which is what is needed for it to continue to expand its monetary scope and mature into a global currency.

11/ #Ethereum has created a self-reinforcing mechanic for the appreciation of ether. Investors are beginning to understand this dynamic, and it is becoming self evident that the flippening may be inevitable.