Co-Founder and partner at Morgan Creek Digital, Anthony Pompliano has fired back at the Ethereum community for saying ETH is money. On his Off-chain page on Substack, Pompliano said ETH is no different than any fiat currency because it shares certain characteristics with fiat money that makes it more similar to fiat than it is to digital money.
“The issue is that Ether is no different than a fiat currency. Fiat currencies have (a) no fixed supply, (b) an inflationary supply schedule, and (c) monetary policy decisions that are decided by a small group of individuals.”
He went on to say the ETH monetary policy is based on time to time issuance of the asset as it does not have limited supply, making it exactly like the US dollar which is being pumped into the economy continuously, adding that it is also not a store of value either.
“The good news for those that believe in ETH as money is that every change to the supply schedule so far has REDUCED the new issuance rate, but the bad news is that the option is always available to increase the new issuance rate. This is similar to our current fiat monetary policies, where the decision makers can increase or decrease the production of new money coming into the system,” he said.
According to Pompliano, only Bitcoin and Gold have the characteristics of money and store of value at the same time. This is because their supplies are limited by design. Bitcoin has only 21 million coins that will ever be mined. So far, more than 17 million have been mined and nothing can be done to increase the supply. Gold also has a finite supply as it is non-renewable, unlike ETH.
While he agrees that DeFi movement is a crucial part of cryptocurrency ecosystem, he said the movement must create a better form of money compatible with the ETH-based DeFi movement, such as the creation of DAI and the idea of bringing Bitcoin’s monetary policy to ERC-20…