Binance Coin

Community members argue over Bitcoin’s 21Mn cap is better or Ethereum’s deflationary model 


Top two cryptocurrencies with most of the market capitalization in the global crypto market, Bitcoin (BTC) and Ethereum (ETH) are being compared again. This time the community is analyzing the two over their being “sound money.”

The working mechanism and use cases of both the major crypto assets are not quite alike. Bitcoin (BTC) has a cap over its circulating supply to 21 million BTC with a sophisticated mining regime. While Ethereum (ETH) holds a deflationary supply for its native asset. Yet the year started with the comparison to get which could be entitled as sound money. 

Proponents from communities of Bitcoin and Ethereum have their own representable arguments. 

The first cryptocurrency Bitcoin (BTC) is often considered as sound money given its limitation of circulation supply. Citing this, a Twitter user noted Ethereum better due to its deflationary model stating that if “BTC is sound” due to supply cap than “ETH is ultrasound” since its supply gets minimized. 

As mentioned earlier, the comparison between leading cryptocurrencies does not make sense and Bitcoin supporters follow the same. While talking about the qualification of sound money, they brought the point of monetary policy’s credibility as the crucial factor to consider instead of not being an ever changing asset. 

Growth Lead at crypto exchange Kraken and prominent BTC supporter, Dan Held noted while replying to the ETH supporter that the asset with “constantly changing” monetary policy has “less credibility.” Raising the flaw within the argument, he said that following this is any other crypto asset shows up with “more deflation, then that would be “sounder.””

In addition, running down with the question on the monetary policy of Ethereum, another bitcoin enthusiast stressed on the changing nature of monetary policy which has changed at least 11 times since its inception. While bitcoin’s monetary policy had not been changed even for once. 

Bitcoin was created by pseudonymous creator Satoshi Nakamoto and launched in 2009. Its mechanism put the cap on maximum supply of cryptocurrency to 21 million coins. 

Ethereum, on the other hand, has a recent update in its monetary policy in August 2021 after introducing Ethereum improvement proposal-1559 (EIP-1559). In this proposal, a burn mechanism was introduced making a portion of the transaction fee in ETH to burn automatically leading to eliminating its circulation supply. 

With the broader crypto market witnessing an upsurge, both the cryptocurrencies jumped significantly in the recent past. BTC is trading at 21,164 USD after 22.5% up and ETH is at 1,565 after a 17.8% surge in the last seven days. 

Nancy J. Allen
Latest posts by Nancy J. Allen (see all)

Read More: Community members argue over Bitcoin’s 21Mn cap is better or Ethereum’s deflationary model 

Notify of
Inline Feedbacks
View all comments

Notice: Undefined variable: ub in /home/c83w5hz05vw6/public_html/ on line 650

Notice: Undefined variable: ub in /home/c83w5hz05vw6/public_html/ on line 659

Deprecated: strripos(): Non-string needles will be interpreted as strings in the future. Use an explicit chr() call to preserve the current behavior in /home/c83w5hz05vw6/public_html/ on line 659

Notice: Undefined variable: ub in /home/c83w5hz05vw6/public_html/ on line 674

Get more stuff like this
in your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.