Anthony Pompliano: ETH Is No Different Than A Fiat Currency

A strong Bitcoin supporter and co-founder of Morgan Creek Digital, Anthony Pompliano, in a recent newsletter, compared Ethereum to traditional currencies. In his opinion, they have too much in common.

“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. Ether has (a) no fixed supply, (b) an inflationary supply schedule, and c) monetary policy decisions that are decided by a small group of individuals,” he wrote.

ShapeShift Founder Erik Voorhees in response to the wrote on Twitter that there are fundamental differences between ether and traditional money:

“Pomp this is just wrong, man. Fiat has value by decree of the State. Ethereum, like Bitcoin, gold, and pork bellies, has value by bids and offers in an open market. You can hate on ETH for a number of reasons, but it ain’t fiat. Having a limited supply is not the condition for avoiding the label of fiat. Fiat means value by legal decree. Ethereum’s value doesn’t come from the decree of government (like dollars, euros, yen).”

Pompliano generally agreed with this comment but was not convinced that the monetary structure of Ethereum is significantly different from traditional currencies.

“ ETH’s inflation schedule is not the same as Bitcoin. But that doesn’t mean it is the same as USD fiat,” Voorhees added. “ And even if its inflation schedule was the same as dollars (ie — at the whim of central banks), that still isn’t a sufficient criteria for fiat.”

Dan Held, director of business development at Kraken Exchange, introduced his perspective into the discussion. He noted that Ethereum and all other cryptocurrencies are distinguished from Bitcoin by the need for trust, which is why they become closer to fiat.

“Trust is required with Ethereum’s monetary policy. The Schelling point behind Bitcoin is the immutable monetary policy gives us more confident in it than any other fiat or crypto. The Ethereum community is trying to meme their way into sound money,” he explained.

Author: Marko Vidrih

Featured image credit: cryptopress