Bitcoins - about to hit $5,000 per coin today!

[obsidian]

Interesting move.

https://finance.yahoo.com/news/microstrategy-rebrands-strategy-bitcoin-inspired-191500833.html

MicroStrategy rebrands as Strategy with a Bitcoin-inspired logo

Bitcoin-maximalist and business intelligence firm MicroStrategy (MSTR) has rebranded as Strategy, unveiling a new identity centered around Bitcoin.The rebrand features a stylized “B” logo and adopts orange as its primary brand color, which the company says symbolizes energy, intelligence, and Bitcoin. With the rebrand, the company announced that Strategy is now “the world’s first and largest “Bitcoin Treasury Company.”

[obsidian]

The ETH Spot ETFs saw an inflow yesterday of $307.8 million. BlackRock's ETHA accumulated $276.2 million. The ETHA fund now holds $4,413.2 million.

https://farside.co.uk/eth/

[obsidian]

US Ethereum ETFs hit record $1.5 billion trading amid Trump's new tariffs
US spot Ethereum ETFs achieved a record $1.5 billion in trading volume on February 3, demonstrating a 23% increase from their previous high, coinciding with a significant drop in crypto prices following President Trump's tariff announcements. BlackRock, Grayscale, and Fidelity led the trading volumes. Despite a downturn in crypto prices, US Ethereum ETFs observed net inflows of $83.6 million, the highest since January 16.

https://cryptobriefing.com/newsbriefs/?id=162400&title=us-ethereum-etfs-hit-record-1-5-billion-trading-amid-trumps-new-tariffs

[gib]

Thanks for the finance lecture, Professor Buffett. I’ll be sure to run ETH through a DCF model before making my next move. Meanwhile, the market will keep doing what it does—being unpredictable and not necessarily aligning with rigid valuation theories. But please, do come back and quote yourself in the future. I’m sure it’ll be enlightening.

You make a lot of bold claims about ETH’s valuation, but you’re also hedging with a $100-$5000 range, which is comically wide. You can’t simultaneously argue that ETH is on a path to collapse while acknowledging that valuation models are highly variable. Markets don’t strictly follow textbook DCF models, especially in crypto, where utility, adoption, and network effects play a major role. And if ETH truly follows security-like valuation principles, why has BTC—an asset with zero yield—outperformed most traditional ‘store of value’ assets in the last decade?

Market - short term it's a voting machine, long term it's a weighing machine. (If you do not understand what that means, do a little research. Very important concept for any investor to understand).

Eth valuation - point is, that valuation metrics are not overly reliable, especially in the crypto space. For example, we don't really know how much Eth will be displaced by competitors, how much Eth transaction revenue will decline if Eth token prices rise, etc. But to be clear, my prediction is that BTC will continue to decline to BTC over time (for obvious reasons). The best we can do is make an educated guess, and chose the most likely of scenarios, discarding the more extreme outlying scenarios (except for max risk tolerance purposes). Short term is harder to predict, although you can see I have been continuously right as Eth fell around 50% to BTC in just the last year alone, falling from around 0.06 Btc for 1 Eth, to around 0.03. An absolutely terrible comparative performance.

"if ETH truly follows security-like valuation principles, why has BTC—an asset with zero yield—outperformed most traditional ‘store of value’ assets in the last decade?" Now we are getting somewhere, for this is indeed the exact question you should be asking yourself.  This entire thread, and especially my comments, have attempted to answer that for you. But in summary, Eth is a capital asset. Btc is a store of value asset. Again, really think about that, and what it means for price - I have not give up hope on you Obsidian!

[Griffith]

Interesting move.

https://finance.yahoo.com/news/microstrategy-rebrands-strategy-bitcoin-inspired-191500833.html

MicroStrategy rebrands as Strategy with a Bitcoin-inspired logo

Bitcoin-maximalist and business intelligence firm MicroStrategy (MSTR) has rebranded as Strategy, unveiling a new identity centered around Bitcoin.The rebrand features a stylized “B” logo and adopts orange as its primary brand color, which the company says symbolizes energy, intelligence, and Bitcoin. With the rebrand, the company announced that Strategy is now “the world’s first and largest “Bitcoin Treasury Company.”

Thoughts on this?

Eric Balchunas on X:

'Here's data showing that the spot bitcoin ETFs and $MSTR to a lesser extent are basically solely responsible for btc's move out of the $30k post-SBF doghouse. I've theorized this in past, ppl got testy, but data shows its true.. via @HODL15Capital'

[gib]

No doubt we are seeing far more buyers buying ETC via the ETF and MSTR. That should be obvious. No dispute there. Buyers tend to move to the easiest purchase method available, and for many these vehicles are more convenient.

What sometimes is forgotten, is that the ETFs and MSTR are made up of, and represent hundreds of thousands, if not millions of individual investors...

[obsidian]

Thoughts on this?

Eric Balchunas on X:

'Here's data showing that the spot bitcoin ETFs and $MSTR to a lesser extent are basically solely responsible for btc's move out of the $30k post-SBF doghouse. I've theorized this in past, ppl got testy, but data shows its true.. via @HODL15Capital'

That's an interesting stat Griffith! I'll look into it more.

[obsidian]

Here's an interesting post by lead Ethereum developer Justin Drake. Some may dismiss this as BTC FUD. But, it is worth pondering:

https://x.com/drakefjustin/status/1887108667675124174

Since the merge, ETH is definitely scarcer than BTC. It's remarkable BTC supply grew 666K BTC, worth $66B, all while ETH supply stayed flat. Today BTC supply grows 0.83%/year, 66% faster than ETH. And for those looking ahead, as I explain below, ETH supply is poised to decrease again.



Scarcity is important, but ultimately the fight for internet money will likely be settled by security. Ironically, the famous 21M BTC cap is to blame. BTC issuance is going to zero—that's Bitcoin's strongest social contract. In a few halvings, issuance will be so small as to be irrelevant.

Here's a shocking stat: in the last 7 days only 1% of miner revenue came from Bitcoin fees. Yes, 99% came from issuance. And that's despite 4 halvings that reduced issuance by 16x, and despite 15 years of search for transactional utility on Bitcoin.

IMO the Bitcoin blockchain is cooked. It takes roughly $10B and access to 10GW to permanently 51% attack Bitcoin. The cost is peanuts for nation states. As for the power, Texas—a single state of a single country—can produce 80GW. The BTC security ratio is 200-to-1, it's a $2T asset secured by $10B of economic security.

Any shortable instrument correlated to BTC mining incentivises an 51% attack attack. There's $20B of Bitcoin mining stocks—those would insta-nuke. There's $40B of open interest on BTC perps—direct short exposure. Not to mention potential short exposure through the $100B in ETFs and the $100B in MSTR.

Will BitVM solve the fee problem? Any BitVM bridge is an incentive to 51% attack Bitcoin. Indeed, a 51% attacker can censor fraud proofs over the challenge period and drain BitVM bridges. Ironically, BitVM is arguably a direct attack on Bitcoin. And no, Bitcoin doesn't have social slashing to recover from 51% attacks.

What if the BTC price grows by 10x, flipping gold, is Bitcoin safe then? Let's say this happens in the next 11 years. BTC would be a $20T asset but issuance would shrink 8x because of the three halvings. The security ratio would grow beyond 1000-to-1. IMO this is untenable especially as BTC institutionalises, becomes more liquid, and ultimately become easier to short in size. Imagine $1T of perp open interest but just $10B of economic security.

Can Bitcoin somehow fix itself before it's too late? Bitcoin is the epitome of blockchain ossification. Can it have 1%/year tail issuance? Ha, good luck fighting the 21M cap! Maybe Bitcoin can switch to PoS and rely on minimal fees? PoS is sacrilege. Maybe Bitcoin can change to another PoW algorithm? Nope, that nuclear option won't help. Maybe Bitcoin can have big blocks and sell data availability at scale? Ser, a holy war was fought over small blocks.

If you made it this far and understood the above, congrats. Even today few appreciate how screwed Bitcoin PoW is long term and what the ramifications are for BTC the asset. This is a frontrunable opportunity but it requires patience. The time frame is not 1 month or even 1 year—it's 10 years.


There's a lot more in his post - very interesting!

[obsidian]

"if ETH truly follows security-like valuation principles, why has BTC—an asset with zero yield—outperformed most traditional ‘store of value’ assets in the last decade?" Now we are getting somewhere, for this is indeed the exact question you should be asking yourself.  This entire thread, and especially my comments, have attempted to answer that for you. But in summary, Eth is a capital asset. Btc is a store of value asset. Again, really think about that, and what it means for price - I have not give up hope on you Obsidian!

That’s a counterpoint to your argument that ETH should be valued like a security using traditional discounted cash flow (DCF) models because it has staking yield and revenue. The "gotcha" is that BTC has zero yield, zero cash flow, and no traditional valuation model, yet it has massively outperformed almost every other store-of-value asset, including gold, over the last decade.

So if your logic is that ETH is doomed because it's starting to be valued like a security, then why has BTC—an asset with none of the usual valuation metrics—become the best-performing store of value? If the market is so rational and valuation-driven, BTC shouldn't be where it is today.

This forces you into a corner: either you admit BTC's success contradicts your rigid valuation framework, or you have to concede that market forces in crypto don’t always follow traditional finance models.

[obsidian]

Market - short term it's a voting machine, long term it's a weighing machine. (If you do not understand what that means, do a little research. Very important concept for any investor to understand).

Eth valuation - point is, that valuation metrics are not overly reliable, especially in the crypto space. For example, we don't really know how much Eth will be displaced by competitors, how much Eth transaction revenue will decline if Eth token prices rise, etc. But to be clear, my prediction is that BTC will continue to decline to BTC over time (for obvious reasons). The best we can do is make an educated guess, and chose the most likely of scenarios, discarding the more extreme outlying scenarios (except for max risk tolerance purposes). Short term is harder to predict, although you can see I have been continuously right as Eth fell around 50% to BTC in just the last year alone, falling from around 0.06 Btc for 1 Eth, to around 0.03. An absolutely terrible comparative performance.

"if ETH truly follows security-like valuation principles, why has BTC—an asset with zero yield—outperformed most traditional ‘store of value’ assets in the last decade?" Now we are getting somewhere, for this is indeed the exact question you should be asking yourself.  This entire thread, and especially my comments, have attempted to answer that for you. But in summary, Eth is a capital asset. Btc is a store of value asset. Again, really think about that, and what it means for price - I have not give up hope on you Obsidian!

You keep repeating that BTC is a store of value and ETH is a capital asset, but that alone doesn’t explain why BTC has succeeded despite lacking traditional valuation metrics. If market participants actually priced assets using DCF models like you suggest, BTC should have been ignored or dismissed entirely. Instead, it became the best-performing asset of the decade. That suggests market forces in crypto don’t adhere strictly to traditional valuation frameworks. Given that, why should ETH be an exception?

[gib]

That’s a counterpoint to your argument that ETH should be valued like a security using traditional discounted cash flow (DCF) models because it has staking yield and revenue. The "gotcha" is that BTC has zero yield, zero cash flow, and no traditional valuation model, yet it has massively outperformed almost every other store-of-value asset, including gold, over the last decade.

So if your logic is that ETH is doomed because it's starting to be valued like a security, then why has BTC—an asset with none of the usual valuation metrics—become the best-performing store of value? If the market is so rational and valuation-driven, BTC shouldn't be where it is today.

This forces you into a corner: either you admit BTC's success contradicts your rigid valuation framework, or you have to concede that market forces in crypto don’t always follow traditional finance models.

Obsidian - it blows my mind that you are asking these questions. Have we really been having this entire discussion without you understanding the core distinctions between "Bitcoin" and "Crypto"? Do you know what the phase "Bitcoin, not crypto" is intended to convey? Seriously???

Eth is a utility token. It is a stake in a project, where the token had value because of the utility it gives access to. Same with Filecoin, or UniSwap, or Solana, or ChainLink. The tokens in these projects derive their value from what they can purchase. (And in most cases, these tokens were issued in a manner akin to security stakes in a company - hence all the SEC scrutiny over them, vs BTC).

Let's say we have a venture where I offer bus services - and I in turn pay you as a shareholder not in cash, but in bus-tickets. It then becomes very easy to value the business. And when I initially launch the business, I seek an investment from you in cash, and give you an equivalent number of bus tickets in return for your investment in the company. Say it pays out 100,000 bus tickets to "shareholders" in a year from profits, and each ticket is worth $1. And say we value a typical bus business at a PE of 10. That then equates to a market cap of $1m for the business. And indeed, it would make no sense, in the long term, for the bus business to be worth 10m, or 100m, unless of there was somehow massive growth (10x or 100x) legitimately expected. In the long run no-one is going to pay me $10 or $100 for a bus ticket worth $1. In the short term, the market price could be irrational - maybe there is lots of excitement about the busses being upgraded to electric, or being painted pink, or whatever. And maybe we will see some people who are "bus ticket collectors" who are prepared to pay a premium for a ticket (we see this also with fiat currency - some people are prepared to pay a little more for a "collector's note"). But in general, over time, the business value will gravitate to the value of its output. That is why we can see a stock like GameStop bidded up to irrational levels in the short term, and why over time, it will gravitate back to fair value. And so, that is where we also are with ETH, and why (for obvious reasons), its market cap, and the price of its tokens, are falling over time. Initially Eth and other "projects" pretended to have something additional in terms of special technology that justified a valuation at a premium to their utility. That scam has long gone, and the market has degenerated entirely to meme's, which essentially is an acceptance that the entire pitch of a "crypto" having some special value due to technical features was a load of BS all along. It should be very obvious now, that the entire "crypto" space is one of a pump and dump circus casino, where in the long run only the issuers and the exchanges win. (And if you are neither of these, then you are the sucker who is being scammed, whether you know it yet or not).

Next you ask about BTC having no yield, and therefore how it can have value. And that is the whole point - BTC is a store of value asset. It is the hardest, and most superior form of money there is. That is what the market is saying, and that is why BTC has a market cap of around 2 Trillion, vs Eth at 350 Billion (along with an infinite number of other alts). Before that we had gold (also zero yield) vs equities (which do have a yield). It was for this reason that Buffett was so against gold (and now BTC) as an investment - the absence of yield means the asset cannot have any intrinsic value. Hence its only value comes from demand, and the demand for a perfect store of value of global wealth happens to be MASSIVE. BTC's "yield" essentially the gain in value it provides, due to its ability to offset devaluation in fiat currencies.

Eth was promoted in a way which tricked the initial buyers into believing that it could be both a store of value (like BTC), "only better" as it also a utility token at the same time. Many of us laughed at this from the outset, and knew it was nonsense, but, especially during the initial crypto frienzie, many investors really believed this pitch, non-sensical and illogical as it is. That of course has now long been debunked, and ever since the qualities of Eth have been better understood by the market, Eth became valued (along with every other alt) more and more based on the utility it provides, hence its ongoing price divergence to BTC. BTC on the other hand is valued on the money it absorbs, as that is the most important utility feature it's unique characteristics provide.

This is really such a fundamental concept, and if you don't get this, you really do not at all have even the core foundation to understand this space. And I don't mean to say this in a demeaning way - I really believe this lack of understanding may explain your current mindset. Again it blows my mind, but I also believe there others of the GameStop / Wall St bets generation, who also still really don't get this. I didn't picture in this category, but I think I was mistaken. I just didn't pick up on this until now.

Please go and do a little research. Watch the "Eth is going to zero" video I posted a while back. Understand what we mean when we say "Bitcoin, not crypto". Again, it is FUNDAMENTAL, to any "crypto investor" that they understand this concept and the key distinction between BTC and "alts". If you don't, you honestly are pretty much mortally handicapped as an investor right from the very outset.

A video which might explain (and again, do also watch the Eth to zero video).

[obsidian]

Obsidian - it blows my mind that you are asking these questions. Have we really been having this entire discussion without you understanding the core distinctions between "Bitcoin" and "Crypto"? Do you know what the phase "Bitcoin, not crypto" is intended to convey? Seriously???

Eth is a utility token. It is a stake in a project, where the token had value because of the utility it gives access to. Same with Filecoin, or UniSwap, or Solana, or ChainLink. The tokens in these projects derive their value from what they can purchase. (And in most cases, these tokens were issued in a manner akin to security stakes in a company - hence all the SEC scrutiny over them, vs BTC).

Let's say we have a venture where I offer bus services - and I in turn pay you as a shareholder not in cash, but in bus-tickets. It then becomes very easy to value the business. And when I initially launch the business, I seek an investment from you in cash, and give you an equivalent number of bus tickets in return for your investment in the company. Say it pays out 100,000 bus tickets to "shareholders" in a year from profits, and each ticket is worth $1. And say we value a typical bus business at a PE of 10. That then equates to a market cap of $1m for the business. And indeed, it would make no sense, in the long term, for the bus business to be worth 10m, or 100m, unless of there was somehow massive growth (10x or 100x) legitimately expected. In the long run no-one is going to pay me $10 or $100 for a bus ticket worth $1. In the short term, the market price could be irrational - maybe there is lots of excitement about the busses being upgraded to electric, or being painted pink, or whatever. And maybe we will see some people who are "bus ticket collectors" who are prepared to pay a premium for a ticket (we see this also with fiat currency - some people are prepared to pay a little more for a "collector's note"). But in general, over time, the business value will gravitate to the value of its output. That is why we can see a stock like GameStop bidded up to irrational levels in the short term, and why over time, it will gravitate back to fair value. And so, that is where we also are with ETH, and why (for obvious reasons), its market cap, and the price of its tokens, are falling over time. Initially Eth and other "projects" pretended to have something additional in terms of special technology that justified a valuation at a premium to their utility. That scam has long gone, and the market has degenerated entirely to meme's, which essentially is an acceptance that the entire pitch of a "crypto" having some special value due to technical features was a load of BS all along. It should be very obvious now, that the entire "crypto" space is one of a pump and dump circus casino, where in the long run only the issuers and the exchanges win. (And if you are neither of these, then you are the sucker who is being scammed, whether you know it yet or not).

Next you ask about BTC having no yield, and therefore how it can have value. And that is the whole point - BTC is a store of value asset. It is the hardest, and most superior form of money there is. That is what the market is saying, and that is why BTC has a market cap of around 2 Trillion, vs Eth at 350 Billion (along with an infinite number of other alts). Before that we had gold (also zero yield) vs equities (which do have a yield). It was for this reason that Buffett was so against gold (and now BTC) as an investment - the absence of yield means the asset cannot have any intrinsic value. Hence its only value comes from demand, and the demand for a perfect store of value of global wealth happens to be MASSIVE. BTC's "yield" essentially the gain in value it provides, due to its ability to offset devaluation in fiat currencies.

Eth was promoted in a way which tricked the initial buyers into believing that it could be both a store of value (like BTC), "only better" as it also a utility token at the same time. Many of us laughed at this from the outset, and knew it was nonsense, but, especially during the initial crypto frienzie, many investors really believed this pitch, non-sensical and illogical as it is. That of course has now long been debunked, and ever since the qualities of Eth have been better understood by the market, Eth became valued (along with every other alt) more and more based on the utility it provides, hence its ongoing price divergence to BTC. BTC on the other hand is valued on the money it absorbs, as that is the most important utility feature it's unique characteristics provide.

This is really such a fundamental concept, and if you don't get this, you really do not at all have even the core foundation to understand this space. And I don't mean to say this in a demeaning way - I really believe this lack of understanding may explain your current mindset. Again it blows my mind, but I also believe there others of the GameStop / Wall St bets generation, who also still really don't get this. I didn't picture in this category, but I think I was mistaken. I just didn't pick up on this until now.

Please go and do a little research. Watch the "Eth is going to zero" video I posted a while back. Understand what we mean when we say "Bitcoin, not crypto". Again, it is FUNDAMENTAL, to any "crypto investor" that they understand this concept and the key distinction between BTC and "alts". If you don't, you honestly are pretty much mortally handicapped as an investor right from the very outset.

A video which might explain (and again, do also watch the Eth to zero video).

I get where you're coming from, but there are major flaws in your argument.

First, your bus ticket analogy oversimplifies Ethereum’s value proposition. ETH is not just a utility token used to pay for transactions—it’s also an economic security mechanism. Staked ETH secures the network, and validators earn fees, meaning ETH holders can derive yield from the protocol itself. That’s fundamentally different from a simple "bus ticket" system.

You argue that Ethereum was falsely presented as both a store of value and a utility asset—but why can’t it be both? Traditional assets often serve multiple roles. Gold is a store of value but also has industrial utility. Apple stock is an investment but also gives governance rights. The idea that ETH must be strictly one thing or the other is a false binary.

Now, let’s talk about BTC’s valuation. You say Bitcoin’s value comes from being the hardest form of money, but that alone doesn’t justify its $2T market cap. If BTC is purely a store of value, its price still depends entirely on demand, just like gold (which has significantly more history as a store of value). Yet, BTC has dramatically outperformed gold. Why? If Bitcoin’s primary function is storing wealth, what gives it the unique ability to accrue value at such a higher rate than other non-yielding assets?

Bitcoin’s market value is still speculative—it grows because people expect more adoption and demand in the future, which is no different from how Ethereum’s price is influenced by network activity and usage. You dismiss ETH’s role in decentralized finance, staking, and security, yet you’re okay with BTC’s valuation being based on faith that people will keep storing value in it indefinitely?

At the end of the day, both BTC and ETH derive their value from market consensus—BTC from its role as digital gold, and ETH from its utility in a decentralized financial ecosystem. Pretending Bitcoin is completely separate from "crypto" ignores the fact that it also shares speculative and network-driven value dynamics with everything else in the space.

So, I get the "Bitcoin, not crypto" mentality, but it’s not as airtight as you make it seem. If you really believe BTC is superior, you should be able to defend its value proposition without needing to misrepresent what Ethereum actually does.

[obsidian]

From a channel called "Simply Bitcoin". Hello, Echo Chamber!

Yes Bitcoin currently dominates the crypto market cap. It is not a given that it will remain that way.

What's your response to Justin Drake's comment that the BTC security ratio is 200-to-1, a $2T asset secured by $10B of economic security?

IMO the Bitcoin blockchain is cooked. It takes roughly $10B and access to 10GW to permanently 51% attack Bitcoin. The cost is peanuts for nation states. As for the power, Texas—a single state of a single country—can produce 80GW. The BTC security ratio is 200-to-1, it's a $2T asset secured by $10B of economic security.

ETH's security ratio is much better IMO. It has a higher economic security on a smaller market cap!

[OlympiaGym]

https://www.fxstreet.com/cryptocurrencies/news/blackrock-doubles-down-on-bitcoin-with-a-5-stake-in-strategy-202502072140

[obsidian]

Hopium?!

[SouJerz]

Wow the human psyche is a terrible thing to taste

[Mayday]

Hopium?!

The problem ETH faces is layer 2 degeneracy. Layer 2s soaking up the inbound capital.

1M tokens created each week. They kill the network. I warned of this years ago and everyone laughed at me.

You have to wait for Vitalik to make a change to the network.

[gib]

1M tokens created each week.

Yep - That's the risk you take when you dabble in shitcoinery, and don't understand what "Bitcoin, not crypto" means. There was a guy around half a year on this thread who got so angry at me for pointing how alts will not in the long term outperform BTC, and explaining why Eth and other alts are securities. He cited all sorts of alts he held which "went up" as some kind of "defence" to the points I was making. He's all quiet now. As I said at the time, "lessons will be learned". And now, I suspect indeed they were...

If you dabble in shitcoinery with a hope of trying to outperform BTC, in the hope that in the end you will have more BTC than if you had just bought and hodled BTC from the outset - that is a very dangerous game, and you are kidding yourself if you think you can reliably do this...

We have BTC going to USD 1m. Opportunity to set yourself up for life if you just stack and chill - and still, there are fools who think "alts" are the road to acquiring more BTC or instant wealth. Its insane, and I am not sure whether to feel sorry for this people, or whether I should continue to try to warn and educate.

[obsidian]

The problem ETH faces is layer 2 degeneracy. Layer 2s soaking up the inbound capital.

1M tokens created each week. They kill the network. I warned of this years ago and everyone laughed at me.

You have to wait for Vitalik to make a change to the network.

The 1M tokens are mostly coming out on Solana. Vitalik has nothing to do with that.

Ethereum's goal is to remain decentralized and allow validators to run on reasonable hardware and bandwidth, with reasonable storage requirements. Solana is designed to run of enterprise hardware. The chain is over 300TB large. You can't run that on home hardware. I have a big ass NAS with (18) 12 TB drives and the Solana chain won't even fit on that. Solana needs 10 gigabit connections to run. That prevents it from being decentralized. It can only be centralized. How many people have 10 gigabit connections?

Meanwhile, you can run Ethereum validators on a Raspberry PI. And they are working on allowing cellphones to become validators.

Decentralization is important because it makes the system more robust against attacks. This is why banks and Sony are deploying on Ethereum L2s. It does not go offline like Solana, the L2s inherit Ethereum's L1 security, and they can at least have some control over their L2. If they try to deploy on Solana L1 they lose that control and they have to count on transactions failures if the latest MEME coin launches.

Here's a post on Reddit that explains why the ETH L1 was not scaled because of the preference for decentralization:

It always was and still is the goal to scale the L1, but scaling the L1 is more difficult than scaling through rollups, so it takes more time. If you would have increased the L1 throughput by 4-8 times many years ago we would have had the following issues.

State and history size: We would be in the range of 4-12 TB of disk usage. Not that easy to find good nvme ssds in that size range. Until 8 TB there are options, but only recently there are consumer options. If you need to go above 8 TB there are only server grade ones and they cost an arm and a leg.

SSD speed: Already nowadays you need good ssds to have a good attestation efficiency. With state being 4-8 times bigger you probably need some of the best ones out there, or even store most of the state in RAM like solana is doing. Not cheap to build a machine like that.

CPU usage. With a small state and the current number of transactions per block we can easily validate a block within the few seconds we have. If you increase the block size the validation time jumps linearly at first and when the state size grows over time the validation time grows superlinear in the long term. Just a few years ago we could not handle that. Nowadays a mainnet block takes a few hundred milliseconds to validate on consumer hardware so we could easily increase it maybe by a factor of 2-4 at the moment by just looking at CPU usage.

Bandwidth: That is the most difficult one to judge. We already know that 10Mbps upload speeds have issues publishing self built blocks. Currently even in the developed world huge parts have upload speeds of 20Mbps-30Mbps, so there is a limit how much you can grow a block before you hit that limit.

All these factors together limit the scope of how much you can scale L1 while still keeping the chain decentralized in the sense that home stakers can participate. Sure, we could go the server chain route and Polygon POS and Binance smart chain have shown that you can easily increase throughput by an order of magnitude if you do that. but Ethereum wants to be the global and neutral settlement layer so it takes decentralization and resilience road instead short term maximum throughput road. If a chain cannot be validated by a large group of unsophisticated actors anymore it becomes a chain that you have to trust intermediaries to not take your wealth from you.

So, realistically we can probably safely increase the block size after pectra by a factor of 2, if you are adventurous a large factor is possible, but we probably better wait for upgrades which tackle the problems above.

[obsidian]

Yep - That's the risk you take when you dabble in shitcoinery, and don't understand what "Bitcoin, not crypto" means. There was a guy around half a year on this thread who got so angry at me for pointing how alts will not in the long term outperform BTC, and explaining why Eth and other alts are securities. He cited all sorts of alts he held which "went up" as some kind of "defence" to the points I was making. He's all quiet now. As I said at the time, "lessons will be learned". And now, I suspect indeed they were...

If you dabble in shitcoinery with a hope of trying to outperform BTC, in the hope that in the end you will have more BTC than if you had just bought and hodled BTC from the outset - that is a very dangerous game, and you are kidding yourself if you think you can reliably do this...

We have BTC going to USD 1m. Opportunity to set yourself up for life if you just stack and chill - and still, there are fools who think "alts" are the road to acquiring more BTC or instant wealth. Its insane, and I am not sure whether to feel sorry for this people, or whether I should continue to try to warn and educate.

The problem is BTC's security ratio is 200-to-1, a $2T asset secured by $10B of economic security. You can permanently attack 51% with less than $10 billion. To attack ETH would require more than 10x that, maybe 100x. An attacker would drive up the price of ETH as they try to purchase over 17 million ETH - 14% of the supply, to try and overcome the staking base. As they buy more and more the price would go up and up because of supply / demand dynamics. Then besides that, they need to configure staking validators. 500,000 or more. That will take a lot of time, hardware, and require a lot of people to pull off.

So you call ETH a shitcoin when it has better security than Bitcoin.

What happens if it goes to a $20 trillion market cap and miner rewards are 1/8th or 1/16th of what they are now? You could end up with a security ratio of 1000-to-1 or more. If BTC is by then a strategic reserve of the US, what prevents the US's enemies from attacking the network?

BTC's hashrate keeps going up, but that's because the ASIC miners are getting more and more powerful. And all miners have access to these new ASICs. So the number gets higher, but BTC mining does not become more decentralized. The opposite happens. It becomes more centralized.

An analogy would be one guy in the neighborhood has an expensive 1000 HP car, and everyone else drives a 100 HP car. He is the fastest. But then a cheap 1000 HP car is released and now everyone drives one.

[French]

Ethereum is an utterly unreformable blockchain. It is ultra-centralized because it relies entirely on Vitalik Buterin. The day he disappears or goes insane (which already seems to be happening), Ethereum will collapse. It is the only blockchain so dependent on its creator, except perhaps TRON with Justin Sun to a lesser extent.

Moreover, Ethereum is being drained by around a hundred ultra-centralized layer 2s with horrible tokenomics, siphoning all the value away from the main network. This fragmentation weakens Ethereum even further, making its future uncertain compared to more robust and independent blockchains.

In contrast, Solana is a company offering a full suite of Web3 solutions, capable of fixing its weaknesses at an incredible speed, creating innovative products, and generating billions in revenue while maintaining a robust network. It has processed $10 billion in transactions within 24 hours—equivalent to 25% of NASDAQ’s daily volume—demonstrating its unmatched efficiency and scalability.

[Mayday]

The 1M tokens are mostly coming out on Solana. Vitalik has nothing to do with that.

There were around 9k ERC20 tokens in 2021. There are over 1.4M now……

I warned of dilution and you got it 100 fold.

But you think adding 100x more tokens and the price going nowhere while being round tripped of 8yr gains to BTC has no correlation?

This is why you have been massively wrong the past few years. The network is fucked. Layer 2 made 5M in fees meanwhile ETH did 400k. Degens are sucking it dry and you think that is has no impact.

You’ll see…. The network will make a HUGE change to kill off the Degens. Until then, max pain is watching everything else run while you bleed.

The only bet is ‘muh President holds ETH’…. you don’t know his timeframe…..

[obsidian]

Ethereum is an utterly unreformable blockchain. It is ultra-centralized because it relies entirely on Vitalik Buterin. The day he disappears or goes insane (which already seems to be happening), Ethereum will collapse. It is the only blockchain so dependent on its creator, except perhaps TRON with Justin Sun to a lesser extent.

Moreover, Ethereum is being drained by around a hundred ultra-centralized layer 2s with horrible tokenomics, siphoning all the value away from the main network. This fragmentation weakens Ethereum even further, making its future uncertain compared to more robust and independent blockchains.

In contrast, Solana is a company offering a full suite of Web3 solutions, capable of fixing its weaknesses at an incredible speed, creating innovative products, and generating billions in revenue while maintaining a robust network. It has processed $10 billion in transactions within 24 hours—equivalent to 25% of NASDAQ’s daily volume—demonstrating its unmatched efficiency and scalability.

Ok Professor Anatoly.

Solana has two founders. Ever heard of Anatoly Yakovenko?! Your argument that Ethereum relies entirely on Vitalik Buterin is like saying Solana relies entirely on Yakovenko. Ethereum will be fine if Vitalik kicked the bucket or even quit. He has actually considered quitting due to all the hate directed at the ETH Foundation and Ethereum in general. Good for him to go on. It's absolutely disgusting. They even received death threats. Shows you how threatened people feel by them. At least the ETH Foundation is transparent about their cash flow. Find me a source about how much the Solana Founders have cashed out of SOL? I looked and it appears they are not very transparent. Shady like Zelensky who wasted all the US Tax Payer money. They can't even tell Trump where all the money went. Ironic that the Solana founder was also born in Ukraine. That scumbag SBF of FTX was also balls deep in Solana.

You call Solana robust when it has had numerous outages. How many has Ethereum had?

Ethereum's TVL dwarfs Solana or any other chain including Bitcoin.

Is Ethereum perfect? Hell no. Which chain is? They are working on improving. It's a constant effort as it is with Solana working to improve their uptime. At least Vitalik and Anatoly seem to get along and have from time to time shown each other support. Crypto needs to drop the tribalism. The space is big enough for all of us to make money. I don't want to see you or Gib or Mayday lose money but I will defend Ethereum when it is attacked.

[obsidian]

There were around 9k ERC20 tokens in 2021. There are over 1.4M now……

I warned of dilution and you got it 100 fold.

But you think adding 100x more tokens and the price going nowhere while being round tripped of 8yr gains to BTC has no correlation?

This is why you have been massively wrong the past few years. The network is fucked. Layer 2 made 5M in fees meanwhile ETH did 400k. Degens are sucking it dry and you think that is has no impact.

You’ll see…. The network will make a HUGE change to kill off the Degens. Until then, max pain is watching everything else run while you bleed.

The only bet is ‘muh President holds ETH’…. you don’t know his timeframe…..

I don't care who's wrong or right. I was optimistic about ETH's price and figured it would have breached $8K already. I underestimated the ETH FUD. My bad! It might even be possible that Ethereum's price is constantly being suppressed for whatever reason. Every time it hit $4k the past year, whales sold off to bring the price down. They could have easily just kept buying like Saylor did with BTC to drive the price up. There has been an organized FUD campaign directed at Ethereum. Reminiscent of the FUD Trump and now Elon have seen. Interesting that Trump is choosing Ethereum because he knows what it's like.

Meanwhile, Bitcoin has been treated like Biden. Very interesting. There is a theory that the TPTB have chosen to prop up Bitcoin with it's low security and at the opportune time let it fail to discredit the entire crypto space. Could be tinfoil BS. But it's insane to think a $2T asset deserves less than a $10B economic security.

You've been wrong yourself. I have no problem to admit when I was wrong. Will you? You called the top of the bull market a year ago, when BTC was approaching the 2021 ATH. If I recall, you said it would hit that mark and then crash and then we are out until 2030. There are so many posts I am not going to look for your post. But I know you said it. You were off the mark.

Gib was also wrong when he claimed they were going to declare ETH a security and that the Spot ETFs will never be approved. As was Saylor. Let's agree we have all been wrong - ok?! LMFAO!

I am curious, where are you getting your 400K fee number? Can you post a source? I just checked Messari and ETH's fees on Jan 19, 2025 were close to $16 million for the day! And Feb 3, 2025 close to $13 million. Most days are over $1 million.

https://messari.io/project/ethereum/charts/fees-and-revenue/chart/fee-tot-usd

Ethereum's TVL dwarfs the other chains at 52.94%. The dominance is the same as it was for parts of 2022. Bitcoin's is only 6.31% and Solana 8.81%.

https://defillama.com/chains

[gib]

Gib was also wrong when he claimed they were going to declare ETH a security and that the Spot ETFs will never be approved.

Arg, well now I need to come back to defend myself. I have been RIGHT throughout this thread and I think everyone knows it.

From the beginning, explaining what an important BTC asset was, (when it was at the 3.5K level) back in 2017, to predicting 100K price target by 2025  - (some here laughed at me and mocked my predictions, some got super angry - they were all proven wrong in time), to explaining why we all need to gravitate to BTC (and to why all alts are inherent affinity scams on BTC, to explaining why alts will fail over time to BTC), to calling (and explaining) Eth's eventual downfall. I timed and called the beginning of 2 prior BTC bull cycles PERFECTLY. Absolutely nailed it. Warned against the possibility liquidity driven ETH capitulation, only to see the exact scenario I warned against play out in less then a week after I gave this warning.  I could go on. Ultimately, everyone here can read my views, make their own decisions, and then only have themselves to thank (or blame), for whatever they ultimately decide to do. I can only guide you, and I believe I have done my best in fulfilling this role.

Yes, I explained in the past why ETH is a security, (and by the way it yes IT IS STILL, a security). You need to understand this, if you are to understand how ETH (and other "crypto" differ from BTC).

I explained, numerous times, why, regardless of what the SEC approved, not matter how you package up and wrap a piece of shit - it still remains shit. Whether you call Eth a security or, not, this does not change its core features and characteristics and faults and flaws and weaknesses. I explained numerous times why ETH's security-like issuance and ownership features would lead to its downfall (for obvious reasons), and I was again, 100% correct. I don't have the time to keep repeating this over and over.

Yes, I expressed the view that I didn't think the SEC should approve an ETH ETF (for obvious reasons), and I was right in holding that view. I obviously cannot dictate what the SEC ultimately does - no one can - but I explained that regardless of what the SEC approves or not, no such approval can alter the various qualities and faults ETH has. And that indeed is exactly what has happened.

As for this latest argument from Justin Drake you keep quoting, to me that indicates that you really are now are in the "denial" moving to an eventual "acceptance" phase. Justin is smart (like you), but he is also really a bit of a nut-case. He is an obvious Eth schill, and he (unfortunately for him), was to smart for his own self. And so, he greedily and shortsightedly backed the wrong horse, thinking he could steal BTC's glory and rape its immaculate conception through fraud and deception. Which in the long term, was a tactic always doomed to fail. As fellow Eth founding developer Eric Conner said just last week to Justin's alarmist nonsense:

"Doesn't really seem like the best to poke at BTC after being smoked on the playing field for the last 4 years)".

You say "crypto needs to drop tribalism". However, you and many of this de-gen generation, seem to fail to comprehend that wealth, and resources, are scarce and finite. So, we inherently do need tribalism and loyalty for BTC to succeed. Which it will do (for obvious reasons).

If we could all create an infinite number of "better than BTC" cryptos which all went infinitely up, that would be wonderful for some for sure - but this is and always was, a naive pipedream - this not how money, finance, or physics work. When I first studied the feasibility of BTC, I KNEW that tribalism and a relentless defence of BTC as THE GLOBAL STORE OF VALUE had to be essential to BTC's success. This was the biggest single attack vector I identified, and boy did the Eth schills try to exploit it. Which is part of the reason why anyone who truly understands finance and economics and moral philosophy hates ETH for the fraud and theft it tried to pull off. (Basically preying on investor's ignorance and their greed). And that, Obsidian, apart from the fact that I do truly want you and other GetBiggers to succeed, is why I am here to keep setting things straight when I see dangerous and misguided views being expressed.

I remember when Justin was predicting ETH flippening BTC. Didn't happen. BTC now 2T, Eth 300B. And it won't ever happen (for obvious reasons). (What WILL happen is that BTC WILL FLIPPEN GOLD. That is a certainty).

At one point he predicted ETH would outperform BTC by 4x this cycle, and that it would hit $16000 per coin. Didn't happen. Indeed ETH underperformed BTC by 50% in just the last year alone, and indeed it fell below 3K per coin.

He knows ETH has huge problems, but he is now grasping at straws and whataboutisms directed towards BTC in the hope that somehow trying to discredit BTC will help his ETH investment. Reality is that the much touted ETH merge, and the Dancun update for Eth have both been an absolute disaster. It can't be undone, and ETH's sound money narrative it was trying to push against BTC has well and truly and definitively entirely discredited (for obvious reasons). Now - will they fuck up this Frankenstein ETH crypto experiment with the so called Pectra update? Yes, quite possibly. That change will in any case  also come with huge further uncertainty and bring even greater credibility risks t ETH that it already now has. You simply can't be sound money if you change your issuance schedules on a whim. This is the entire problem that BTC was invested to defend against! So, that narrative is totally lost. And it was unfortunately that very narrative of "better sound money than BTC" which ETH investors were betting on when they bought ETH. Which now of course has been proven totally wrong for all to see.

The FUD Justin keeps pushing for BTC eventually being attacked are far-fetched at best. He fails to understand (or at least conveniently fails to acknowledge) both game theory, and the impact of economic incentives. He fails to accept and learn from what happened during the block-size wars. He fails to admit that even in his far-fetched theory, the individual nodes after such a theoretical 51% attack simply will not accept the new illegitimate chain (for obvious reasons). He fails to understand that in the future, as a base layer of money, not only will BTC mining still be highly incentivized, but there will be great money to be made from securing base-layer transactions. When BTC is THE global standard of wealth, fees will be much much higher than they are now. And countries, and financial institutions will be happy to pay for the benefits and security and certainty provided. And he fails to accept that, at the right time, perhaps 20 years from now, BTC owners may  make some very carefully-reasoned tweaks to the code, if certain emerging risks do need to be addressed. (However, one thing that will never change is the BTC issuance rate).

OK - and now I really will take a break. I will read comments occasionally. But I will resist attempts at trolling attempts to bring me back. But I will be back in time, likely to point out Eth has hit a 5 year low to BTC (which will happen, for obvious reasons).