‘Ethereum is recreating fiat money’

Watch: ‘Bitcoin Will Eat Global Finance Until It’s $1M Per Coin’ | The crypto mile

Merging Ethereum with proof-of-stake “is essentially a recreation of the fiat money system,” a prominent bitcoin maximalist has claimed.

Bitcoin pioneers Max Keizer and Stacy Herbert were featured on Yahoo Finance’s The crypto mile and ridiculed Ethereum’s merger with a low-power proof-of-stake method for validating transactions.

Since last week’s successful upgrade to a new way to verify transactions on the Ethereum blockchain that uses 99.95% less energy, pressure has been put on bitcoin (USD-BTC) to abandon its energy-intensive “proof-of-work” consensus mechanism and follow in the footsteps of Ethereum.

The use of fossil fuels to power the generators that power proof-of-work mining operations has become a contentious issue considering the rapidly worsening climate crisis.

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However, the less power-hungry proof-of-stake method is not without its detractors. There is concern that the Ethereum blockchain (ETH-USD) could be compromised if nefarious operators exploit ‘proof of stake’ and accumulate the most staked ether, thus gaining control of the blockchain.

Blockchain control by a centralized entity is the antithesis of what every blockchain has been trying to emulate since Satoshi Nakamoto published the Bitcoin White Paper in 2008.

Read more: Three main risks related to the Ethereum merger

This method of ensuring maximum democracy and autonomy is called decentralization and is achieved by spreading the validation nodes of a blockchain around the world.

The more individual and independent validation nodes there are, the more secure the network will be in the long run.

But in a proof-of-stake system, this concentration of validation nodes could be achieved by those who can stake the most ether (ETH-USD), and this is a point not lost on ardent bitcoin advocate Max Keizer.

This week The crypto mile Keizer said: “Ethereum has nothing to do with bitcoin and its proof-of-stake method is essentially a recreation of the fiat money system.

“The Ethereum Foundation can change the code on a whim many times, it’s completely insecure and now it’s even worse.

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“This is putting the spotlight on bitcoin and bringing capital into bitcoin. Ethereum is selling versus bitcoin.”

The TV host whom Micrstrategy’s Michael Saylor has called ‘the high priest of bitcoin’ added: “I think the ethereum sell off trend will continue and we will see if ether goes to zero versus bitcoin.

“This is what we will see for all altcoins because none of them offer anything that will attract capital for any serious reason.”

DENVER, CO - FEBRUARY 18: Ethereum co-founder Vitalik Buterin speaks at ETHDenver on February 18, 2022 in Denver, Colorado.  ETHDenver is the largest and longest running Ethereum Blockchain event in the world with over 15,000 cryptocurrency devotees attending the week long gathering.  (Photo by Michael Ciaglo/Getty Images)

Ethereum co-founder Vitalik Buterin. Photo: Michael Ciaglo/Getty Images.

Speaking to Yahoo Finance about centralization concerns on the Ethereum network after the senior security advisor merger at halborn Limaris Torres said: “Many users and developers are concerned about the dominance of some players in the ETH ecosystem.

“That is, players like Coinbase and Lido, which validated about 46% of the blocks after the merger, and the Flashbots relay, which delivered about 82% of the blocks since the merger.

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“The goal of the decentralized network was to have a monetary system that could not be controlled by a government, but in light of recent OFAC Sanctions Related to Tornado Cash, users in the ecosystem are concerned that major players will be forced to comply with regulatory bodies and blacklist certain user addresses. If this were to occur, it would challenge the very spirit of the ecosystem.”

Torres added that the point of a decentralized network is that it cannot be controlled by any government, like the current fiat money system, so people all over the world will have the ability to send payments across borders, regardless of differences in regimes or politics.

Federal Reserve Building, the headquarters of the Federal Reserve Bank.  Washington DC, United States.

Federal Reserve Building, the headquarters of the Federal Reserve Bank. Washington DC, United States.

What is the fiat money system?

The fiat money system Keizer is referring to is the system of global currencies that are produced by central banks and backed by governments rather than anything of intrinsic value, such as precious metals or commodities.

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The current fiat monetary system is governed by the US dollar and has been in existence since Richard Nixon removed the dollar from its gold backing in 1971.

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The so-called Nixon Shock saw the cancellation of direct international convertibility of the United States dollar to gold.

Since this time, dollars can be created freely by the Federal Reserve, without having to be backed by gold reserves.

Visual representation of digital Cryptocurrency.  The crypto market has been hit this year with nearly $2 trillion wiped from its value since its peak.  In Brussels, Belgium, on September 10, 2022. (Photo illustration by Jonathan Raa/NurPhoto via Getty Images)

Bitcoin. Photo: Jonathan Raa/NurPhoto/Getty.

Bitcoin Forecast

Bitcoin was born in January 2009 when the pseudonymous creator Satoshi Nakamoto mined the ‘genesis block’.

This event occurred in the wake of the last global financial crisis, when the decline in value of a small set of assets spread rapidly and caused cascading failures among interlinked financial institutions around the world.

Now, the world’s largest cryptocurrency could be about to experience a new financial crisis.

But this time it will face a financial crisis as a mature asset that institutional and retail investors have embraced.

Stacy Herbert and Max Keizer are renowned for their belief that bitcoin will replace fiat currencies, including the dominant US dollar.

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They see their target market as the sum total of global finance and predict that the digital asset will eat up the current financial system until it creates a new paradigm and becomes the world’s reserve asset, thus forming a new ‘Bitcoin Standard’. , which follows in the footsteps of gold.

Speaking to The Crypto Mile, Keizer reiterated his belief that the world’s largest digital asset by market cap will prevail in the long run against dollar dominance and the rise of altcoin challengers such as ethereum.

Taking the sum total of the global financial system, the American broadcaster and filmmaker excitedly announced that this is the true goal of bitcoin.

Keizer said: “Ultimately, the total addressable market for bitcoin would be $400 trillion. That’s the sum total of the global financial world.

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“Bitcoin will essentially eat that up, so we’re going to see much higher prices of $1 million or $2 million per bitcoin.”

SAN SALVADOR, EL SALVADOR - SEPTEMBER 5: Detail of a Bitcoin acceptance sign on September 5, 2022 in San Salvador, El Salvador.  On September 7, El Salvador commemorates its first year with Bitcoin as legal tender.  (Photo by Kellys Portillo/APHOTOGRAFIA/Getty Images)

Bitcoin acceptance sign in San Salvador, El Salvador. Photo: Kellys Portillo/Aphotography/Getty.

El Salvador Bitcoin Law

It has been a year since El Salvador became legal tender and the media and economists around the world are unanimous in their belief that the Central American nation’s experiment with bitcoin has been a failure.

Bitcoin has fallen nearly 70% in value from its November 2021 all-time high of $68,000 per coin.

Stacy Herbert and Max Keizer have spent extended periods in El Salvador, and were asked by The Crypto Mile how bitcoin adoption is progressing based on their first-hand experience on the ground.

Herbert responded: “I think El Salvador is winning and winning big, and that’s why the headlines say otherwise.

“Like the headlines in the mainstream media, America is winning by destroying the dollar, and Europe is winning by freezing to death this winter.

A general view shows the National Palace building and the National Cathedral in downtown San Salvador, El Salvador April 25, 2022. Photo taken with a drone.  REUTERS/Jose Cabezas

A general view shows the National Palace building and the National Cathedral in downtown San Salvador, El Salvador April 25, 2022. Photo taken with a drone. REUTERS/Jose Cabezas

“El Salvador is winning in a way that is difficult to quantify because it is not necessarily measured in fiat.”

Keizer then claimed that since El Salvador enacted its Bitcoin Law and made the digital asset legal tender on September 7, tourism, GDP, and foreign investment are on the rise.

Read more: Bitcoin Becomes Legal Tender in El Salvador Amid Suspicion and Protests

He added: “Bitcoin as legal tender has been extraordinary and continues to show what can be done when you have a courageous leader who is willing to turn his back on the global central banking establishment like the IMF, and give sovereignty to his people.” .

Bitcoin was created in the last recession of 2008, due to mistrust in central banks and the financial system.

But, since then, we’ve had over 12 years of buoyant markets with near-zero interest rates and booming stocks, so Bitcoin’s raison d’être had yet to be realized.

Bitcoin has never been tested in the conditions in which it was born. Now that the digital asset could be about to face a financial crisis that it was designed to respond to, will it become the promised store of value?

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