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- Ethereum researcher Justin Drake pointed out that Bitcoin faces potential security vulnerabilities as its network attack cost remains low due to the decreasing block reward.
- The ETH supply increased after the Dencun upgrade, but Bitcoin still grows faster in terms of supply, with Bitcoin holdings valued significantly higher than Ether.
Justin Drake, the Ethereum Foundation researcher, has taken shots at Bitcoin as BTC reaches closer to its final supply limit of 21 million tokens. He wrote that Bitcoin “is cooked” while adding that Ethereum will become the “ultra sound” money as its issuance decreases over a period of time.
Ethereum Researcher on ETH Supply Efficiency
In a Feb. 5 post on X, Drake commented on Ethereum’s status, stating that for Ether (ETH), currently priced at $2,643, “to become ultra sound again, either issuance has to decrease, or the burn has to increase.” He expressed optimism, adding,
I believe both will happen.
Interestingly, Drake’s comments come at a time when the Ethereum supply has actually been on the rise after the Dencun upgrade in April 2024. Although ETH became deflationary following the Merge upgrade in 2022, however, after the Dencun upgrade, the supply has once again reached pre-Merge levels.
Interestingly, Ethereum Foundation researcher Justin Drake compared the ETH issuance to that of the Bitcoin blockchain. He said that after the Dencun upgrade, a total of 657,000 BTC have been added to the network, whereas only 469,000 Ether have been added to the Ethereum network thereafter.
The Bitcoin holdings are valued at approximately $63.4 billion at current prices, while the Ether holdings amount to just $1.23 billion. “Today BTC supply grows 0.83% per year, 66% faster than ETH,” Drake said.
Drake also believes that Bitcoin’s supply cap of 21 million BTC has led to long-term security risks. As we know, A staggering 99% of Bitcoin miners earn from block rewards, with just 1% earning from network fees over the past week. He noted that Bitcoin faces security risks because the network’s attack cost remains relatively low. Drake added:
The Bitcoin blockchain is cooked. It takes roughly $10 [billion]and access to 10 [gigawatts]to permanently 51% attack Bitcoin. The cost is peanuts for nation-states.
Stressing this, Ethereum educator Anthony Sassano stated: “It’s utterly insane to me that Bitcoiners still don’t see the obvious catastrophe headed their way.”
Despite this optimism, the Ethereum price has underperformed most altcoins in the segment. There’s a massive 40% surge in Ethereum short positions by hedge funds, unprecedented in the altcoins’ entire history, as reported by CNF.
Bitcoin Community Slams Back
Analyst James Check said that critics of Bitcoin’s sustainability often overlook key factors such as advancements in energy technology, improved mining efficiency, and strong economic incentives.
He compared Bitcoin’s potential reserve status to gold, suggesting that high transaction fees would be a natural consequence, much like the fees institutions pay to securely store gold.
Check also highlighted the importance of ASIC mining rigs in determining profitability, noting that bankrupt miners selling rigs at discounted prices enable new participants to enter the market and maintain network security, as mentioned in our previous article. Over time, he explained, network fees will cover operational costs, while the subsidy has already addressed capital expenditures
