Ethereum becomes ultrasonic silver, according to founder of ConsenSys

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ConsenSys founder and co-founder of Ethereum (ETH), Joseph Lubin, has hinted that Ethereum is moving to “ultrasonic silver” status ahead of the London hard fork which is expected to activate around 12:30 UTC August 5.

In an interview with Bloomberg TV, Lubin was interrogates on the impending EIP-1559 upgrade, which will see Ethereum move from an auction-based fee market to a fixed-price, burn-out mechanism.

Lubin said the London hard fork is part of a larger global movement in which the first step is the ‘democratization of the Earth’, and the second step is the democratization of the decentralized finance system (DeFi) and the introduction of ultrasonic silver:

“The second step that is in full swing right now is the democratization of the global decentralized financial system. And this step is the introduction of something people call ultrasound money.

The term ultrasound money is a long-standing meme held in Ethereum-based communities that laughs Bitcoiners who describe BTC as “healthy money” because of its capped supply of $ 21 million.

The meme refers to the EIP-1559 proposal’s combustion mechanism that could cause Ethereum’s supply to deflate after more Ether is destroyed than created. Each trade will incur a base charge, which will cause the supply of the asset to decrease from here on out. Some believe this will give ETH a stronger value proposition than Bitcoin (BTC) as an ‘ultrasonic currency’.

“So we are a fixed amount of gold on the planet. And the fixed supply of Bitcoin is a healthy currency for some people. With $ 13 billion of Ether stuck in Ethereum 2.0 and $ 70 billion stuck in decentralized finance, we have a huge demand for the Ether token, ”said Lubin.

“And now we are burning the Ether token with the introduction of the London hard fork,” he added.

Related: DeFi Attracts 2.91 Million Ethereum Addresses, According To ConsenSys

ETH seems unlikely to become deflationary soon after the London hard fork, and the upgrade does not guarantee that by default. Twitter user “korpi” pointed out on August 2 that this “does not mean that ETH immediately becomes a deflationary asset.” For this to happen, the burnt ETH must be greater than the ETH issued in block rewards. This is more likely after switching to proof of stake.

Bitcoin maxi Peter McCormack seemed unhappy with Lubin’s interview and talks about ultrasonic money, noting on Twitter that:

“Ultrasonic money is a misleading use of language. This implies that Ethereum is better than Bitcoin. While centralizing in a directional manner and operating with a flexible monetary policy.

User “bobMull12314085” did find the side fun, however, stating that “you maxis are so sensitive”.

The London hard fork is a major step in the journey to Ethereum 2.0, which will change the consensus algorithm from Proof of Work (PoW) network to Proof of Stake or PoS.