Ethereum Frontman Criticized by Dutch PlanB Analyst Adjusted S2F Model for Bitcoin
Russian-Canadian-born Ethereum co-founder, Vitalik Buterin, has taken to Twitter to bash the stock-to-flow (commonly referred to as S2F on Twitter) model, the crypto for bitcoin that became popular on Twitter. Gone, thanks to the pseudonymous analyzer PlanB. in the Netherlands.
Vitalik Closes Bitcoin S2F
Prodigy IT engineer Buterin tweeted that S2F and other financial models provide a “false sense of certainty and predeterminism” to ordinary investors, while talking about the price of an asset (we’re talking about bitcoin in this particular case). are talking). Therefore, Vitalik concluded, these models deserve all the derision they get from users and critics. Furthermore, he tweeted that the above model “doesn’t look really good anymore.”
Chinese crypto journalist and blogger Colin Wu has reminded the community that, according to PlanB, the bitcoin stock-to-flow model worked great from March 2019 to March 2022, when bitcoin traded at $4,000 and $45,000, respectively. .
PlanB believes that, eventually, bitcoin is bound to reach $100,000, perhaps in 2023.
Mati Greenspan, former chief analyst at eToro and now founder of Quantum Economics, jokingly warned Vitalik that he could be blocked by PlanB because the analyst has already blocked Mati, apparently because Greenspan is using his charts and BTC. Price was criticizing the model.
Stock-to-flow isn’t really looking good now.
I know it’s rude to boast and all that, but I think financial models that give people a false sense of certainty and predictability that number-wish-ups are harmful and deserve all the ridicule they get. . https://t.co/hOzHjVb1oq pic.twitter.com/glMKQDfSbU— vitalik.eth (@vitalikbuterin) 21 June 2022
PlanB on Ethereum and S2F
Two years ago, PlanB stated that Ethereum could be valued based on its usefulness, not scarcity, which is the case with Bitcoin. Dutch analysts were unable to find a way to implement the S2F model on Ether as it has no fixed supply, unlike BTC, and may even reduce the minting of new Ether. Depending on the decisions of Vitalik it could be restarted in the future. As for bitcoin, it is programmed for only 21 million coins.
However, the switch to proof-of-stake protocol as part of rolling out Ethereum 2.0, expected this summer, assumes that the production of new Ethereum coins will drop by as much as 99% as miners run out of jobs. And new coins will be generated by staking.
How Stock-to-Flow Works
Stock-to-flow assumes that the more an asset is depreciated, the higher its value and the better store-of-value it creates. Here the inflow is the rate that an asset produces per year, and the stock is how much of it is there and available to investors.
In 2019, the S2F ratio of gold was 62. This indicates that 62 years would be necessary to produce the current gold supply, with the price of gold being relevant. Silver has a S2F ratio of 22.