TL;DR
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If Ethereum wants to scale AND continue to hold the title of ‘Ultra Sound Money,’ it needs to move from the Bloomingdales model, to the Walmart model.
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If Ethereum’s transaction rate goes down (like it has recently), the supply of ETH actually goes up, watering down its overall value.
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So in order to stay ‘ultra sound’ Ethereum needs to become the Walmart of crypto: Instead of processing a small amount of global monetary transactions at high fees (anywhere between $3-3000), the ETH network needs to transition to high transaction volumes, with super low fees.
Full Story
Bloomingdale’s 2022 revenue = $2.8B Bloomingdale’s model = sell expensive items, in low volumes.
Walmart’s 2022 revenue = $573B Walmart’s model = sell cheap items, in high volumes.
If Ethereum wants to scale AND continue to hold the title of ‘Ultra Sound Money,’ it needs to move from the Bloomingdales model, to the Walmart model.
Confused? Here’s what we’re on about:
Every month, there’s a certain amount of new Ethereum created, with no cap on how much can be created in total, over time.
To combat this constant inflation rate, a chunk of each fee is destroyed every time an Ethereum transaction is made.
The more ETH transactions are made → the higher the transaction fees become → the more ETH is burned.
…the idea being that the total amount of Ethereum will actually decrease over time, as more people start using it (giving it the title of ‘Ultra Sound Money’).
The only problem is…
If Ethereum’s transaction rate goes down (like it has recently), the supply of ETH actually goes up, watering down its overall value.
So in order to stay ‘ultra sound’ Ethereum needs to become the Walmart of crypto:
Instead of processing a small amount of global monetary transactions at high fees (anywhere between $3-3000), the ETH network needs to transition to high transaction volumes, with super low fees.
Step 1: ensure low fees, regardless of current transaction volume.
(Because no one is going to adopt to a global monetary network that’s charging $3-$3000 a piece, in fees).
