• A friend of Paul Graham sold 80% of his bitcoin for ETH

  • Paul Graham (pictured speaking at Y Combinator) of Silicon Valley is promoting eth to his 1.3 million Twitter followers by publicly stating:

    “A friend of mine who is almost never wrong about money converted 80 percent of his Bitcoin into Ethereum.”

    It’s unclear who this friend is. Probably not Fred Wilson, because he was probably already 80 percent in eth, even predicting a flipping back in 2017.

    Many of Silicon Valley’s influential VCs are likely to be ethereum first, as ethereum has given rise to a slew of crypto native startups in various waves of innovation.

    The current one is tokenized jpeg NFTs that are venturing into gaming, with students now being paid in tokens to play with the NFTs of richer individuals to develop points and levels so the NFTs “earn” or are worth more.

    And that’s just the beginning; it’s possible that we’ll see some ping pong between defi and NFTs as boom-iness or focus shifts from one to the other.

    Bitcoin, on the other hand, cannot be easily dismissed because it is essentially unchangeable. In essence, bitcoin 2021 is the same as bitcoin 2009, with almost no changes except at the very edges that effectively make no difference.

    As a result, you can be more confident than with any other cryptocurrency that its fixed limit will not change, at least not without a massive debate and another fork.

    Thus, it is likely that it is neither bitcoin nor eth, as it became clear in late 2017 that bitcoin has the ideological fighting spirit, whereas eth has the technical toys. Both would be significantly poorer if the other did not exist.

    Silicon Valley, on the other hand, began betting on eth specifically after the blocksize debate, so for many of them it’s just eth, and in this case 20% of bitcoin.

    In this case, presumably because eth is halving, with 42,000 eth now burned. So this ‘never wrong’ friend is possibly just playing form in the sense that if eth’s supply is decreasing, then eth’s ratio against bitcoin should increase provided everything else remains constant, or even better, if demand actually rises in anticipation of the supply and demand rebalancing.

    In terms of substance, Tesla hasn’t purchased eth yet, though Elon Musk has, possibly because eth’s supply parameters are constantly changing, albeit in the direction of less new supply.

    So it is unclear which utility is more valuable. A dumb blockchain that does little more than guarantee an assured fixed limit, or a smart chain that is still figuring out long term supply but has pretty cool financial apps or qualities that now extend to gaming in a post-prototype manner, as Axie Infinity has passed one million active users, a first in the crypto/tokenized games space.

    Long term, the safest bet is probably a bit of both, with the two assets likely complementary rather than in direct competition, at least for now, unless we get a flippening this time, which would necessitate a doubling of the ratio.

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