"Drake: ETH to Become 'Ultra Sound' Money, Bitcoin 'Cooked'

Ethereum Foundation researcher Justin Drake sparked a debate among cryptocurrency enthusiasts when he argued that Ether (ETH) will become "ultra sound" money "soon enough" as its issuance decreases, while Bitcoin (BTC) is "cooked" as it moves closer to its 21 million supply cap.

Drake, in a Feb. 5 X post, stated that for Ether to become "ultra sound" again, either its issuance has to decrease or the burn has to increase. He believes that both will happen. Ethereum's issuance became deflationary after the Merge in 2022 but started to increase in April 2024 following the Dencun upgrade, which reduced fees for layer-2 networks and the overall amount burned.

However, Drake compared ETH's issuance with that of the Bitcoin blockchain, finding that Bitcoin added 655,000 BTC to supply since the Dencun upgrade, compared to 462,000 ETH added to the Ethereum network during the same period. That Bitcoin is worth around $63.5 billion at current prices, while the Ether is worth just $1.25 billion.

Drake argued that the Bitcoin blockchain's 21 million supply cap could lead to long-term security risks, as miner revenue mostly comes from block rewards. He added that Bitcoin was vulnerable to security risks due to the relatively low cost to attack the network.

However, analyst James Check told Cointelegraph that critics of Bitcoin's sustainability fail to account for considerations such as energy advancements, mining efficiency, and economic incentives. He argued that if Bitcoin reaches reserve status, high fees are inevitable, similar to how institutions pay to store gold securely.

Check also argued that advancements in energy sources, especially nuclear power and wasted energy utilization, will reduce mining costs. He claimed mining stabilizes energy grids through demand response, reducing maintenance costs for operators.

Meanwhile, Drake acknowledged that Ethereum has its own problems, such as the incentivizing of excessive staking, which displaces ETH as "pristine" collateral. He also said it has systemic risks with liquid staking platforms such as Lido. He proposed a "Croissant Issuance" model, which is a declining supply issuance that drops to zero when 50% has been staked and