Evolution of Ethereum: New Capitalism and Three Assets

Can Ethereum Overtake Bitcoin? This question was once ridiculed like "can EOS surpass Ethereum", but now as the exchange rate of Ethereum to Bitcoin continues to soar and ETH2.0 is approaching, this question is no longer a joke. For example, Messari senior research analyst Ryan Watkins believes that once Eth2.0 and PoS are completed, Ethereum may replace Bitcoin as the largest encrypted asset. Today, let's talk about the evolution of Ethereum, why we are optimistic about the future of Ethereum and the possibility of challenging Bitcoin. When it comes to capitalism, you may think of capitalist empires such as the United Kingdom and the United States, but one country has to be mentioned, the Netherlands. In Europe in the seventeenth century, the most powerful country was neither Spain, Portugal, nor England, but the Netherlands, known as the "sea coachman". The strength of the Netherlands comes from the advanced shipbuilding industry on the one hand. When the Netherlands reached its peak, the tonnage of Dutch merchant ships accounted for 3/4 of the total tonnage of Europe at that time, and the maritime trade was basically monopolized by the Netherlands. On the other hand, it comes from the developed commercial trade. It can be said that the Netherlands invented capitalism, and capitalism shaped the Netherlands. In 1602, the Dutch East India United Company, the world's first joint stock company, was established; the total sales of Solana NFT reached 2.35 billion US dollars, second only to Ronin and Ethereum: News on June 6, in more than two years, Solana has become one of the preferred chains for NFTs. According to Be[In]Crypto's research, as of June 5, the total sales of NFT on Solana was about 2.35 billion US dollars, currently ranking third, second only to Ronin and Ethereum. The blockchains following Solana are: Flow, Polygon, WAX, Avalanche, Palm, Tezos, Waves, BNB Chain, and Panini. (BeInCrypto) [2022/6/6 4:04:56] In 1606, the world's first stock exchange mainly focused on financial stocks was established in Amsterdam, the Netherlands, a century earlier than the London Stock Exchange; in 1609, The world's first bank with modern significance was born in Amsterdam. The Bank of Amsterdam has the attributes of a central bank, embodies the country's credit, manages the currency and credit system in a unified way, and becomes a bank that issues money. When the Netherlands established the first well-functioning loan system, which could create debt more easily, capitalism took root in the Netherlands and went to the world. Therefore, the Netherlands is also known as the "first capitalist country" in the world. Hundreds of years have passed, and a new capitalist system has begun to be established, which is the New Netherlands of the digital world, Ethereum. Gnosis will develop the Ethereum client Erigon's Rust language to implement Akula: On June 11, the Gnosis team announced that it will stop maintaining the Ethereum client OpenEthereum and will migrate to the Akula project. Akula is the Ethereum client Erigon (Erigon was formerly Turbo - Rust implementation of Geth). It was previously reported that the new Erigon client will support all the functions currently provided by OpenEthereum 3.x on the Ethereum mainnet, and introduce several new concepts: modular client design to achieve client parallel development; a new "flat " model, which takes up less disk space; preprocesses the data outside the storage engine, so that the database write operation speed can be increased by an order of magnitude; synchronization technology in stages to improve the synchronization speed. [2021/6/11 23:31:55] The change of Ethereum lies in the establishment of a new application layer and value layer on the Internet. Web 2.0 Internet is a centralized database and centralized data Internet. Facebook, Google, Amazon and their products represent the pinnacle of the application layer of Web 2.0. Ethereum offers an alternative to transferring value directly over the Internet, and one of its major innovations is the integration of the "Ethereum Virtual Machine (EVM)" into its blockchain. Standard & Poor’s launched Bitcoin Index and Ethereum Index: Jinse Finance reported that Standard & Poor’s launched the first batch of three encryption index products on Monday, including Bitcoin Index (SPBTC), Ethereum Index (SPETH) and a combination of the two (SPCMC). All three indices use data from partner Lukka. An S&P spokesman said each index measures price appreciation, not actual prices. By comparing the two indices, it can be seen that the value of Bitcoin has increased by 95.67% year-to-date, while the value of ETH has increased by 273.72%. [2021/5/4 21:21:40] In other words, with EVM, Ethereum can run software, and the software can process digital assets on its blockchain, so there is an application layer on Ethereum, and the new Debt ecology, new stock trading system... A whole set of capitalist ecological mechanisms can be established and operated quickly and at low cost. The old capitalist system can be described as "meatspace + digital". In a "meatspace + digital" economy, each asset class has its own exchange, custodian and market, so cross-market Value transfer requires capital and time costs. All asset types on Ethereum (stocks, bonds, assets, real estate, virtual land, etc.) are developed in the same language, so frictionless transactions between each asset can be achieved. Ethereum Solidity launched the Solidity Forum for developers to discuss language design and compiler issues: Ethereum Solidity launched the Solidity Forum based on the open source discussion platform Discourse for developers to discuss the design of the Solidity programming language, Solidity compiler, Solidity documentation, and Solidity versions, etc. question. However, urgent Solidity support questions, bug or vulnerability reports, specific discussions of Ethereum research, and proposed EIPs are outside the scope of this forum. [2021/2/2 18:41:24] In the "meatspace+digital" system, individual users need to wait days or even weeks to transfer stocks from one custodian institution to another, but only It takes a few minutes. Therefore, the most imaginative feature of Ethereum is to become the future global settlement layer and build a complete capitalist ecosystem on Ethereum. Ethereum 2.0 will be an evolution of Ethereum. According to David Houman, Chief Operating Officer of RealT, after Ethereum 2.0, ETH will become the first asset in history to have all three asset class attributes: capital assets, consumable assets, and value storage. In 1997, American economist Robert J. Greer wrote a paper "What is an asset class?" "The asset class is divided into three categories. Golden Morning | China Opens Hotel Accepting Ethereum Wyoming Creates Blockchain-Friendly Bank: 1. China’s First Hotel Accepting Ethereum Opens 2. European Parliament Holds Meeting to Discuss Blockchain Applications 3. XRP Cooperates with Three Financial Institutions xRapid product 4. British Chancellor Hammond: Blockchain can solve trade issues in Brexit 5. Former US President Clinton: Avoid excessive regulation of new technologies such as blockchain 6. Wyoming creates blockchain Friendly Banks Attract Bitcoin Startups 7. UK Land Registry Uses Blockchain to Replace Its New Property Tracking System 8. Apple Co-Founder: The Encryption Industry Will Not Achieve Expected Effects in the Short Term The Government Will Regulate 9. Bank of Canada Deputy Governor: The Bank of Canada is considering how to deal with the risks of encrypted assets [2018/10/2] 1. Capital assets Capital assets refer to any assets that can generate future cash flows. For example, stocks that generate cash flow in the form of dividends and bonds that generate cash flow in the form of coupons, as well as rentable real estate, are fundamentally characterized by discounted valuation of the cash flows that may be generated in the future. 2. Consumable/Convertible Assets These assets can be consumed or converted into another asset, but cannot generate future cash flows by themselves. For example, oil, wheat, coffee, in other words, such assets are physical commodities. The difference between convertible assets and capital assets is that such assets cannot be valued by discounting future cash flows. 3. Store of value assets This type of asset cannot generate income or be consumed, but it has economic value. The value of this type of asset lies in the recognition of investors. Currencies and collectibles are typical examples of store-of-value assets. Examples include gold, art, or bitcoin. In 2019, David Houman put forward his opinion, "When ETH gradually becomes a "three-character asset" that plays a triple role in the economy and meets all the needs of the new economy at the same time, it is the best currency model in the world." 1 .The shares in the Ethereum network are equivalent to the "shares" in the Ethereum network. The PoS pledge mechanism of ETH 2.0 makes ETH itself a productive asset. It can generate income through pledge, which makes it captured by the system The value of growth. 2. Claims on Ethereum are claims on Ethereum network fees. In this respect, it behaves like a bond. Ethereum is a bond issuer, and Stakers are bond holders, and receive corresponding benefits. Unlike traditional bonds, Stakers can redeem ether "on order" (without maturity), similar to embedded options on bonds. In particular, ETH acquires the qualities of a sovereign bond, as the platform is by design solvent and has no risk of default. 3. The right to produce for Ethereum Owning ETH, you have the right to work on Ethereum and the right to charge fees. ETH is also a mechanism to ensure incentive alignment between the Ethereum network and its workers, all workers must have ETH in order to work for Ethereum. If you want to be an employee of the Ethereum network, or pay for related services, you must own ETH and be aligned with the network. ETH can be understood as a consumable energy source. With energy, our world can function normally. Energy is the economic foundation that powers the world economy. Every transaction on the Ethereum network (sending tokens or interacting with smart contracts) costs Gas and is priced in Gwei. After the introduction of EIP-1559 (scheduled for July 2021), these fees will be "burned", just like traditional gas or oil, and Ether will become a consumable/convertible asset that is continuously consumed ( commodity). If you pay attention to DeFi, you should know that ETH acts as a value store in the DeFi ecosystem. When ETH is locked, it often means that ETH will become the basic collateral. Bitcoin has a fixed supply of 21 million and a declining inflation rate, also known as "digital gold". In contrast, although Ethereum has no fixed supply, the inflation rate will continue to decline in the future. After ETH 2.0 is fully converted to PoS, the additional issuance of ETH on the entire network will drop sharply, causing the inflation rate to drop from the current 4.54% to 1.58%, which is not only lower than the expected inflation rate of global currencies in 2021 (3.29%) , and will be lower than Bitcoin's inflation rate (1.8%). In addition, the EIP-1559 proposal has been approved and will be implemented in the Ethereum London hard fork upgrade in the middle of this year, officially linking the growth of the Ethereum economy with the scarcity of ETH assets. For a long time, Ethereum's monetary policy has been "minimum necessary issuance", that is, the amount of ETH newly issued by the Ethereum protocol is "small enough" to ensure the security of the Ethereum network. EIP-1559 will destroy ETH used as transaction fees, that is, this part of ETH will be removed from the total circulation, and destroying ETH means that the scarcity of ETH will increase. The POS mechanism of ETH2.0 and EIP-1559 will make Ethereum more valuable storage properties. Finally, back to the original question, can Ethereum surpass Bitcoin? My personal point of view is that Ethereum will get more value recognition and realize value-added in the future, but it still cannot shake the status of Bitcoin in this cycle, and there is a theoretical possibility in the next cycle. From the perspective of the source of funds, both Bitcoin and Dogecoin directly absorb the flood from the fiat currency world, while the capital inflow of Ethereum is more of the capital overflow of Bitcoin. In terms of competition, Bitcoin has no rivals in the track, while Ethereum faces more challenges. Just as Ethereum wants to challenge Bitcoin, other old and new public chains are also challenging Ethereum. Exchange side chains such as BSC\HECO, and new public chains such as Solana\Near\Avalanche are absorbing funds and users from Ethereum. Ethereum needs to work hard to defeat its competitors first, while Bitcoin just needs to lie there and embrace the collapsing fiat currency world. The success of Ethereum comes from initiative, while the success of Bitcoin comes from passivity. This requires Ethereum to make continuous progress and not make fatal mistakes. But I still look forward to the day when Ethereum and Bitcoin face-to-face and directly wrestle with each other. Therefore, at least until 2024, I will not sell ETH.

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