A reader asked the following question in the comments:

Do you still believe that Ethereum's total market capitalization will one day exceed Bitcoin's total market capitalization?

Yes, I still believe that Ethereum's total market capitalization will one day exceed Bitcoin's.

My assumptions and logic remain the same as I have shared before:

I believe that public chains based on blockchain technology will become platforms for a new economy in the future, and I believe that the total value carried by this platform may exceed the value created by human society today. Therefore, I think there must be such a public chain.

For a public chain to support such an ecosystem, it must possess characteristics that cannot be compromised, such as decentralization, censorship resistance, and security, and it must also be Turing complete.

Currently, I believe that only Ethereum meets these conditions, although it still has many issues and continues to face criticism.

According to Ethereum's current token economic mechanism, ETH can capture the ecological value carried by Ethereum (including layer two, layer three, and even more layers of expansion).

Although currently, layer two expansions capture most of the economic value in this ecosystem, I believe the fundamental reason is that the overall economic scale is still not large enough.

The reason for the insufficient economic scale has been shared repeatedly in my previous articles: there is too little original content on-chain.

However, I believe that this ecosystem will definitely rise in the future, and ETH will certainly capture ecological value.

Since ETH can capture ecological value, and ecological value will continue to expand, then ETH's market capitalization may exceed Bitcoin's market capitalization.

Bitcoin's value relies on consensus; it is very similar to gold. In the future, it will definitely rise, but once it reaches a certain height, the rate of increase will likely become smaller and may even approach a certain value infinitely.

In contrast, Ethereum's value is driven by the economic ecosystem; theoretically, it can develop eternally and expand infinitely, with no upper limit on its growth.

Using gold as an example may help us see the patterns in this.

The exit of the gold standard from the historical stage is a very typical case.

Before the effective existence of the gold standard, thousands of years of economic development in human society were sufficient to be measured by gold, or in other words, the gold held by humanity was enough to encompass all the value created.

However, after the Industrial Revolution, especially in contemporary times, the development of human society has been at an exponential speed, and the pace of value creation has far exceeded the amount of gold mined.

At this point, if we still mechanically bind the value of currency to gold and forcibly restrict the issuance of currency, it would lead to deflation, harm the economy, and severely restrict human development.

Take Bitcoin as an example.

In our ecosystem alone, I believe many people firmly believe that Bitcoin's market capitalization will exceed that of gold in the not-so-distant future, right?

But how long has Bitcoin existed?

How long has gold been discovered?

Bitcoin's history is not even a fraction of gold's history.

Yet, this new phenomenon has created such brilliant value in such a short time; isn't this a living example of the development of human society and technology?

Since economic development and the value created by human society will inevitably break free from the constraints of gold and will exceed the total market capitalization of gold, why can't Ethereum, which may carry the on-chain economy, exceed the total market capitalization of "digital gold"?

So I still believe this, and I think that day does not seem particularly far away.

This Saturday (March 8) at 8 PM, we will have an online discussion. Everyone can post their questions in the comments below.

https://x.com/Dao_Views/status/1896193692953899228

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