I don't grasp that Ethereum thing

in #ethereum6 years ago

I don't grasp that Ethereum thing. Please help me where I am wrong:

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I cannot buy Ethereum-GAS anywhere, there is only Ethereum-ETH. So I buy 10 ETH from an exchange and send it to my adress 0xABC..XYZ (let's assume this cost me nothing).
If I want to buy into an ICO (which is what I usually do with the ETH), I send my 10 ETH to the ICO address. This transaction (sending + processing in the ICO-contract + transfer of tokens) needs some Ethereum-GAS. Therefore, as part of my transaction (in MyEtherWallet), I define what price I am willing to pay for each unit of Ethereum-GAS in terms of Ethereum-ETH. Let's say the transaction needs maximum of 0.001 Ethereum-GAS (you have to estimate this in advance) in total and current price of this is 3 Ethereum-ETH per Ethereum-GAS, then this costs me 0.003 Ethereum-ETH for this transaction. Therefore I can buy into the ICO for only 9.997 ETH.

So far so good. I cannot see why there is a differentiation between Ethereum-ETH and Ethereum-GAS after all. For me it makes no sense to talk about Ethereum-ETH at all. Ethereum-ETH is in fact only Ethereum-GAS for me and nothing else.

So if I buy my 10 ETH from an exchange, the only thing I have really "in hand" is GAS, which I can now spend in Ethereum transactions. When the network is not busy, I have to pay a low amount of GAS / ETH for my transaction (e. g. in above example "factor" 3 ). In case of a clogged network it may be a high price (factor 50). It is like a car which consumes 3 ltr / 100 km of gas in case of good weather and 50 ltr / 100 km of gas in bad weather. But the weather does not turn gas into some magical substance called Ether. Even if I call gas by the name Ether, it is still gas.

TDLR: I my opinion, ETH is just gas. A utility token which has to be payed for every single action performed on the ethereum network. Although it might make sense to buy ETH because I expect higher demand for the use of the Ethereum platform in the future and therefore higher gas "factors". ETH is mined in every block. In addition, every ETH used to pay for the ethereum transactions is not burnt, but rewarded to the miner.

What would happen to the car gas price, if you could simply collect the burnt gas at the exhaust (let us assume that only the car service station can empty the collected gas tank and sell it to the oil companies again). I suppose, it would lower the gas price by a lot. In the long run, only if the economy grows, the gas price also grows.

This means, the gas price (= Ethereum) price rises only if

  1. People see gas as something interesting to speculate on ==> demand increases
  2. Ethereum platform use increases more than the inflation due to mining

I don't see how anyone can assess 1) and 2) so optimistically that they expect ETH to outperform even BTC.

Ethereum might be useful as a platform to run smart contracts. Therefore the platform gas has value. But I cannot see the gas as an interesting store of value.

And what happened if somebody created a platform which

  1. uses bitcoin as gas
  2. has a smart contract language fully compatible with Ethereum

And what happens if there was a platform which

  1. uses bitcoin as gas
  2. has a smart contract language where you can mathematically prove that the attack surface of the contract is of size zero?

I don't grasp that Ethereum thing.