Money 1.0 was commodity money. Money 2.0 was fiat money. Money 3.0 is programmable money. Ether is money 3.0.
twitter.com/crn_maximizer/status/112620467696...
twitter.comPosted May 9, 2019, 2:59 AM UTC
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twitter.comEther will likely continue to act money-ish within Ethereum but I don't see how it is ever going to be good money when it has such a wildly fluctuating value. To me it's more like a commodity like oil. Sure it can be used as money and is even ok for that in some contexts but isn't something like DAI better programmable money? Ether is only used as money now because there isn't the supply of those. As supply grows these will eventually eat into existing ether-as-money use-cases. And that is ok.
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I agree with you that Dai is attractive to many people. For people who like their money stable, there's Dai. But what I find very interesting is that not everyone needs their money to be stable relative to fiat. Recognizing that there's different people with different needs is the first step to understanding why ETH is being used as money today.
If you assume that ether is a store of value, then you have reason to accumulate it. That should be pretty uncontroversial now, if only because of the effects of increased lockup from DeFi products, reduced issuance from lower miner requirements after FFG is live, potential burning fees under EIP 1559, and ultimately the changes that come from staking ether after the PoS upgrade.
So if you start with the SoV assumption, which many people do already, you're motivated to keep ETH as the unit of account as a means of accumulating more of it. IMO, this explains why so many blockchain native products are priced in ETH independently of the price of ETH in terms of dollars. Because the owners see ETH as a SoV and are looking to stay within the ETH economy to increase their exposure to it.
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Do you know what is privacy when using money?
When I use FIAT money, the whole world is not aware of what I spend and how I spend it...
Or use a BTC privacy wallet (Samourai, Wasabi...).
More than this it's almost impossible for an average user to "program money"... because there are not ETH "programmable wallets"
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If...then... else...
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These kinds of slogans were fun at first, but the more you learn, the more it seems inaccurate.
History is much more nuanced and money have come in all kinds of forms throughout history. The record of something of value can come from any type of construct. Even less tangible than commodities.
And the constant complaints against Bitcoin are often unwarranted. Bitcoin has programming capabilities albeit severely limited and transaction types (smart contracts) are hard-coded in the client. Yes, Ethereum is the first proper implementation of a state based version of Bitcoin. It massively improved the programmability of the outputs.
However that freedom has come at a huge efficiency cost. That programmability is not needed in most cases. >90% of externally owned accounts are either abandoned or take up way more space than needed. Unused/untouched contracts should not be part of the state. Even Bitcoin has this design flaw where the UTXO is slowly growing out of control (not a problem for many years)
I do believe that a state based version of Bitcoin with a proper EVM is superior in principal, but it's the execution that really matters and I certainly hope that developers of ETH 1.x and ETH 2.x take this into account.
They have. There's work being done to add state rent to the chain. This would help with state bloat of the chain. The latest proposal strikes a great balance of backwards compatibility with existing contracts while making sure that abandoned states don't need to be downloaded by every node for eternity.
As for slogans. These are just mental models. Meant to help grok an otherwise very complicated topic. If they're helpful, then they're worth having around. If not, then we find better ones.
This. I need this to help spur me on to digging deeper.