Bitcoin’s design is simple. A fixed supply cap of 21 million coins, a predetermined issuance schedule, and proof-of-work securing the chain. It is digital scarcity in its purest form. Lubin described it as “a better gold than gold.”

But scarcity cuts both ways. Christian Catalini, an MIT economist and fellow Forbes contributor, frames it clearly in “Some Simple Economics of Stablecoins”: Bitcoin’s supply expands “slowly and predictably in the short run” and is “capped in the long run,” meaning demand shocks “directly translate into sharp fluctuations in its price.”

Predictable supply. Unpredictable value.

Ethereum’s Utility Loop: Scarcity Through Usage

Ethereum took a different route. After its shift to proof-of-stake, part of every transaction fee began to be burned. When network activity is high, Ethereum’s supply can contract. Scarcity emerges from usage, not from a fixed rule.

Lubin calls this the network’s “native monetary loop.”
Use the network and ETH is burned.
Stake ETH and it is locked.
Scale via rollups and they settle back to Ethereum using ETH as collateral.

As more stablecoins, tokenized funds and DeFi applications settle on Ethereum, the demand for ETH rises because the network literally cannot operate without it.

ETH is the currency required to use the Ethereum network. More activity means more ETH is consumed or locked, pulling directly on supply. This can make ETH scarcer as usage rises, but the effect is not fixed — it varies with fees, rollup adoption and upgrades such as EIP-4844.

In this sense, Ethereum functions less like a static commodity and more like a programmable monetary system, one that adjusts its supply dynamics in response to economic activity.

Why Fiat Money Has Value — And What It Reveals

To understand this loop, it helps to look at fiat money. Economists have long noted that state money derives part of its value from obligation: taxes must be paid in the national currency. That creates guaranteed demand through law, not through a fixed supply.

The parallel matters.
Fiat is demanded partly because the state requires it.
Ethereum is demanded because the network requires it.

Two very different mechanisms — but both rely on use, not scarcity, to sustain value.

Predictability Depends on What You Anchor

Predictability in monetary systems matters. The European Central Bank puts it plainly:

Current best practice in central banking views a high level of monetary policy predictability as desirable.

But monetary predictability takes different forms:

Bitcoin is predictable in supply but volatile in purchasing power.
Ethereum is predictable in design but variable in supply, depending on network activity.
Fiat is predictable in policy framework, even as supply adjusts through credit creation and interest-rate decisions.

No system is predictable in all dimensions. Each anchors a different aspect:

Bitcoin derives value from scarcity,
fiat from state-backed obligations,
and Ethereum from a network that must use its own native fuel — i.e., its own money.

Scaling Meets Credibility

Ethereum’s monetary loop is tied to network usage, but usage cannot grow without scaling. That is the purpose of upgrades like EIP-4844. By introducing blobs and lowering rollup data costs, the upgrade expanded data capacity and reduced congestion.

The roadmap continues this approach. Proto-danksharding and full danksharding aim to increase throughput while reinforcing credible neutrality by making it easier to run a node — the software that verifies blocks and enforces consensus. Lower requirements broaden participation and reduce reliance on large operators.

Justin Drake of the Ethereum Foundation describes the long-term challenge as balancing credibility with throughput. Bitcoin maintains credibility through a constrained base layer; high-capacity chains maximize throughput but often at the expense of neutrality. Ethereum’s strategy is to scale by expanding data availability and making nodes easier to run, increasing throughput while further strengthening decentralization.

Utility vs. Simplicity: The Monetary Question

Ethereum’s supporters argue that money anchored in utility has an edge as finance becomes programmable. Settlement fees, staking, smart contracts, tokenized funds and payments infrastructure all create direct, mechanical demand for ETH.

Critics counter that money should be simple, stable and easily understood — especially in stress events. Catalini’s research shows how complex stabilization mechanisms can fail when assumptions break down. For them, Bitcoin’s fixed cap is a feature, not a flaw.

This raises a deeper question: should money be scarce by permanent rule, or scarce in response to economic activity? Different philosophies yield different answers.

A Multi-Money Future

Lubin does not claim Bitcoin will disappear, nor that fiat’s role will diminish. Instead, he anticipates a monetary environment where different forms of money serve different purposes:

Bitcoin for digital scarcity.
Fiat for legal trust and policy steering.
Ethereum for programmable economic coordination.

Whether ETH ultimately flips BTC may be less important than how these systems interact — and which platforms global markets choose for settlement and store of value.

The next monetary era is unlikely to belong to a single type of money. It may instead belong to the architectures that prove most adaptable, neutral and useful.

After all, money is a human invention that has changed dramatically over the centuries, and it is unlikely to stop evolving now.