Kevin O’ Leary: Ether On Track to Become Ultrasound Money
Kevin O’Leary has stated categorically via Cameo on August 9, 2021, that he thinks the successful implementation of the EIP-1559 and the impending transition of the smart contracts blockchain to the proof-of-stake (PoS) consensus will make Ethereum’s ether (ETH) an “ultrasound” deflationary money.
O’Leary Predicts Ether’s (ETH) Deflationary Future
Kevin O’Leary, a one-time staunch critic of bitcoin (BTC) and other cryptocurrencies, have joined the growing list of people singing the praises of Ethereum following the hitch-free activation of the network’s highly anticipated London hard fork which facilitated the implementation of several key improvement proposals including EIP-1559.
In a Cameo video on August 9, O’Leary, a successful Canadian businessman, author, and television personality, who once described bitcoin (BTC) as a “useless currency,” argued that the new gas fee burn mechanism introduced by EIP-1559, coupled with the upcoming Eth1 and Eth2 merge slated for December this year, would effectively transform Ether into deflationary and sound money like bitcoin (BTC).
In his words:
“EIP-1559 introduced a very important change to the monetary policy of Ethereum. Currently, the fees that users pay to send transactions go to the miner, but after this improvement, the fees will be burned. When you combine this with EP-3675, which switches the network to proof-of-stake, Ethereum will become deflationary.”
It’s no news that there can only be 21 million in existence and this supply ceiling is what makes the world’s flagship cryptocurrency a solid hedge against inflation. A good number of Ethereum faithful have argued in recent times that Ether’s excess gas fee burn feature would ultimately make ether a deflationary asset and Mr. Wonderful has echoed the same sentiments.
“If bitcoin (BTC) is sound money because of the 21 million ceiling, ETH is ultrasound money because there is no supply floor,” he declared.
Not So Delaflationary
As reported by BTCManager earlier in August, it’s worth noting that the burning of excess Ethereum gas fees does not automatically make the cryptoasset deflationary.
According to Twitter user @Korpi87, for ETH to become a deflationary asset, the amount of ETH burned must be higher than ETH issued in block rewards and this is only achievable after the transition to PoS.
With exactly 21,752 ETH burned so far, and the network’s transition to PoS moving ahead smoothly, it’s only a matter of time before ether (ETH) becomes a truly deflationary cryptocurrency like king bitcoin (BTC).
At press time, ether (ETH) is exchanging hands for $3,191, with a market cap of $373.59 billion, according to CoinMarketCap.