Is Ethereum a form of money or not? Therefore, is it worth buying Ethereum as an investment, and, consequently, believe it is good if the Ethereum price goes up.

We recently read an analyst saying that Ethereum is no store of value because of the fact that it has an infinite supply, as opposed to fiat money which has a finite supply. One of the key characteristics of money is that is a store of value, next to the fact that it is a medium of exchange and that is has a unit of account.

We should not argue that Ethereum is a medium of exchange and that is has a unit of account. However, we would like to challenge that thought. We strongly believe that Ethereum is much more honest money than fiat money for three fundamental reasons.

First, the idea that fiat money is honest money is a big farce, based on a misperception of many people. Fiat money may have theoretically a finite supply, but the reality is that central banks decide whatever they want and they believe is good when it comes to the money supply. In the last two decades the monetary supply has risen in a parabolic fashion, with an unimaginable acceleration since the 2009 crisis.

The key question is: are central banks doing what is best for society or for the banking system? That is a totally different objective, because, visibly, their primary driver was to rescue the banking system. No central banker ever confirmed what exactly the impact was for society.

In our view, honest money support society first and foremost.

Second, “your money” on “your bank account” does not exist. It is not there. All money in the bank is electronic currently, and the money in physical format is just a very small fraction of what exists on bank accounts.

Ethereum, like any other respected cryptocurrency, is registered on the blockchain. It is a know piece, a known block, in the ledger. Every Ethereum (or Bitcoin for that matter) that you buy has a unique code and is known on the whole network.

How much more honest can money be? How dishonest is the current fiat money system? If fiat money was registered, similar to cryptocurrencies, then would we not see confiscation as we have seen in recent years (think Cyprus, Greece, and the likes).

Third, Ethereum is decentralized. It is the participants who decide on demand. With fiat money, it is a central bank that makes all decisions: interest rate, supply, decisions to manage demand, the number of physical bills versus ‘real’ volume of money, etc.

For these 3 reasons we believe that Ethereum is a much more honest form of money than fiat money.

The biggest drawback of Ethereum is potential security holes, which, arguably, will become less of a risk over time as more and more participants more (in an open source fashion) to make Ethereum a more secure platform.

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