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10/02/25
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Ether’s Path to ‘Ultra Sound’ Money: Comparing Issuance and Security with Bitcoin
A researcher from the Ethereum Foundation has suggested that Ether (ETH) is on the path to becoming “ultra sound” money due to anticipated reductions in its issuance. This assertion comes amid discussions surrounding the implications of Bitcoin’s (BTC) fixed supply of 21 million coins. The contrasting views have stimulated conversations between supporters of both cryptocurrencies.
Following the Ethereum network’s transition to a more deflationary model during the 2022 Merge, Ether’s issuance saw an uptick in April 2024 due to the Dencun upgrade, which aimed to lower transaction fees on layer-2 solutions. An analysis revealed that since this upgrade, Bitcoin’s supply has grown significantly more than Ether’s, leading to comparisons of their issuance rates. Currently, Bitcoin’s supply is increasing by approximately 0.83% annually, outpacing Ether by 66%.
Concerns have been raised regarding the long-term security of the Bitcoin network, which relies predominantly on miner rewards for revenue. With an increasingly fixed supply, the reliance on network fees becomes critical, posing questions about sustainability. The assertion has been made that the cost to execute a 51% attack on Bitcoin is achievable for state actors, raising alarms about the network’s security framework.
Conversely, proponents of Bitcoin argue that such criticisms overlook advancements in energy efficiency and mining technology. They contend that, as mining operations evolve, economic incentives will maintain the network’s vitality, particularly if Bitcoin achieves reserve asset status, which would naturally drive higher transaction fees.
While Ethereum is not without its challenges, including concerns about excessive staking and systemic risks from liquid staking platforms, new ideas like a “Croissant Issuance” model have been proposed to innovate its issuance strategy. This model could help achieve a balanced supply dynamics, potentially addressing some of the issues that arise from staking practices.
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