Does ethereum bitcoin penetrate into his game?

President Trump Declare Yesterday, the Presidential Working Group was directed to move forward in a encryption strategy reserve that includes XRP, Sol, Ada, Bitcoin (BTC) and Ethereum (ETH), adding, “I love Bitcoin and Ethereum!”

For years, Bitcoin was Be praised As “digital gold” – a rare store and value can be predicted. But in recent years, Ethereum has shifted quietly over Bitcoin on one major side: expanding the width. since Integration In September 2022, ETHEREUM supplies grew at a slower rate than Bitcoin, challenging the old assumption that Bitcoin is the best form of proper money.

Unlike the firm limit of Bitcoin of 21 million BTC, ETHEREUM is designed to be adaptive, allowing to provide it with expansion or contracting based on the network activity. So, does Ethereum Bitcoin penetrate into his game? Let’s dive into!

Is ethereum more sound?

The maximum fixed supply in Bitcoin of 21 million BTC has a distinctive advantage. Unlike the Fiat currencies such as the US dollar (USD) and Euro (EUR), which can theoretically expand without limit, Bitcoin follows a strict half -cycle, which reduces the new version every four years. This process guarantees that the new bitcoin rate that enters blood circulation slows over time, which enhances its scarcity.

After the latest in April 2024, Bitcoin’s annual width growth decreased to 0.83 %. This censorship release reinforced his reputation as a strong store, closer to gold.

Ethereum, however, follows a different approach to managing the show. Unlike Bitcoin, which has a steady limit, Ethereum can adapt over time. Since the merger, when Ethereum turns into a stock proof (POS), it has become increased contraction. This change reduced the use of energy by about 99.95 % and significantly reduce the creation of the new ETH, making it rare over time.

In addition, a promotion was presented on August 5, 2021, how Ethereum calculated and processing transactions fees, which led to the introduction of a mechanism that burns the fees. As a result, Ethereum supplies sometimes decreased instead of expanding it. As shown in the figure below, since the merger, the total ETHEREUM supplies grew at a much slower rate than Bitcoin.

While Bitcoin guarantees the absolute scarcity, Ethereum is more air -conditioned and flexible, and adapts to market conditions. If proper funds are about the growth growth, the ethereum has exceeded the bitcoin currency unexpectedly in this regard in recent years.

Fiat Money, Bitcoin, and Ethereum?

Bitcoin and Ethereum follow different critical policies on how their supply expands over time. But how do they compare traditional currencies such as the US dollar (USD) and Euro (EUR)?

As shown in the figure below, since 2020, the width of the US dollar money (M2) has expanded by 41 % – more than four times the growth of Bitcoin and Ethereum – while the width of the money in the euro (M2) grew more than twice its average. This highlights the contrast between the flexibility of FIAT Money, the strict bitcoin display, the adaptive ETHEREUM approach, which sits between them.

Bitcoin and Fiat currencies operate on both ends of the extension spectrum. Bitcoin’s fixed display model guarantees scarcity, while Fiat Money can expand or contract based on economic policy. However, excessive expansion often leads to inflation, as it appears with the US dollar and the euro since 2020. It maintains a scarcity like Bitcoin but has a supply mechanism that can expand or contract based on network activity.

A historical lesson on gold

History offers one of the strongest arguments against a fixed monetary system.

Before 1933, the US dollar was backed by gold, limiting the width of money to gold reserves. While this guarantees stability, it prevents expansion during economic shrinkage.

When the stock market crashed in 1929, severe shrinkage took place. Stalled on the gold standard, the United States and other countries could not expand the scope of money to stimulate recovery.

Great Britain abandoned the gold standard in 1931, with others who follow. The United States was held until 1933, when President Franklin Roosevelt (FDR) exceeded the value of the dollar, reduced gold subsidies, and expanded the money of the money effectively. Economists like Milton Friedman and Ben Bernanky later attributed this step while helping to end the great depression.

Gold may be a good store for value but it can be a problem of exchange, especially in breaking the cycle of shrinkage and supporting economic growth. Meanwhile, Fiat Money expands without limits, risk of inflation. The perfect monetary system may be somewhere between them.

The show continues

Trump’s support for Bitcoin and Ethereum in his strategic declaration of encryption will undoubtedly raise more discussion on any form of encrypted currency.

Although Bitcoin is still the original “digital gold”, Ethereum appears as a strong competitor – not only because of its scarcity, but for its flexibility and ability to economic adaptation.