The propounder and creator of Bitcoin’s stock-to-flow (S2F) price model, PlanB, has said, after analyzing the ETH S2F-value relationship, he found no link between the two entities, hence, Ethereum only has value for its utility and not scarcity.
PlanB made the assertion above, in response to a statement by the CEO and founder of Nugget’s News, Alex Saunders, who said he updated his own ETH Stock to Flow Model.
Alex said there are proposals from two new Ethereum Improvement Proposals (EIP) to slash the block reward of Ethereum from 2 to 1 or 0.5.
Based on his S2F model, the Nugget’s News founder went on to explain that if Ethereum block reward is reduced to 1, it would be equivalent to 2022 PoS issuance, and if slashed to 0.5, the S2F will be greater than 100, consequently, Ethereum would have $10 trillion extrapolation market value.
PlanB, one of the top choices and famous crypto analysts, said he ran analysis on the ETH S2F-value relationship and no connection was found. PlanB further explained that ETH negates the foundation principle of the S2F model – scarcity, as ETH supply policy can be altered, unlike BTC.
So Ethereum is not scarce. The analysts said, serious minded crypto investors are clearly aware of this and will not fall prey of the latest ETH2 narrative.
“ETH can have value for its utility, not scarcity”.
PlanB further likened ETH to central banks since he needed to trust someone else for the total available ETH rather than running ETH node himself. He said the CEO is exclusively in charge of deciding the future of the cryptocurrency, and unlike Bitcoin, it is less secure and has lower hashrate.
Due to the fact that Ethereum is a premined cryptocurrency among some other features, it is completely different from Bitcoin.
The tweet thread continued with a response from Alex, who said, he agrees that Bitcoin is the hardest form of money, however, he believes that reducing the supply of Ethereum, would be of great benefit to the cryptocurrency.
Nonetheless, PlanB said even if the supply of the second largest cryptocurrency can be reduced, the founder or other major stackholders of the cryptographic project are capable of ballooning it.
Other important crypto personnel joined the conversation as Alex Saunders said he has no doubt that the supply of Ethereum can be increased, but increasing both ETH and BTC supply require network consensus.
Pseudonymous Bitcoin WizardofAus averred that it would be unrealistic to compare the consensus needed for altering Bitcoin supply to ETH’s.
