Author: Liu Jiaolian
Overnight, BTC (Bitcoin) hovered around 69k. The clamor of ETH ETF gradually dissipated and returned to calm. The play has just begun, and the ending is still suspenseful. $4,000 seems to be a key resistance level for ETH, and the last two sprints have failed to effectively break through.
Cryptologist, Blockstream founder, author of the sixth citation of Satoshi Nakamoto's Bitcoin white paper, and inventor of hashcash, Adam Back, responded to Bloomberg ETF analyst Eric Balchunas's remarks on ETH ETF, saying: "Pre-mined Ponzi scheme. Please stay away."
![](https://img.jinse.cn/7231836_image3.png)
What did Eric Balchunas say? What he said was: "One of the challenges facing the Ethereum ETF in breaking into the world of baby boomers who have a 60/40 allocation to traditional stocks/bonds is how to distill its purpose/value into an easy-to-understand sentence, just like "Bitcoin is digital gold". If so, what is it?"
So some netizens mocked Adam Back and said: "With the ETF already approved, this guy is still trying to push the "pre-mined Ponzi scheme" route. Unparalleled response"
Adam Back was not to be outdone and replied: "Am I wrong? Can an ETF negate the facts?"
The netizen retorted: "Do you really think a Ponzi scheme can be approved for an ETF?"
Adam Back replied: "Yes, it seems that this Ponzi scheme (it is estimated that there will be dozens to hundreds of Ponzi schemes in the future) is indeed engaged in ETFs. In addition, various high-risk traditional finance (tradfi) also have ETFs :) "
The netizen continued to press on: "Idiot tradfi may have ETFs, but there are no real Ponzi schemes... because that's crazy (even tradfi is not that stupid). Whatever half-logic you use to classify ETH as a Ponzi scheme, it also applies to BTC in my opinion, so it feels like you are courting death."
The netizen continued to add: "I personally think that ETFs should stop at Ethereum, but you may also be right, and we may see more ETFs (probably not a good thing, even if it makes my wallet bulge). All evidence shows that Bitcoin and Ethereum have become mainstream, and I think people who hold both coins (or both at the same time) should be happy."
Adam Back responded bluntly: "You need a fair competitive environment, so if they provide an ETF to a pre-mined ICO, they also need to provide ETFs to others, otherwise this is a banana republic."
Adam Back responded bluntly: "You need a fair competitive environment, so if they provide an ETF to a pre-mined ICO, they also need to provide ETFs to others, otherwise this is a banana republic."
Adam Back The "banana republic" mentioned by Back is a political science term.
According to Wikipedia, in political science, the term "banana republic" refers to a country with political and economic instability and an economy dependent on the export of natural resources. In 1904, American writer O. Henry coined the term to describe Guatemala and Honduras, which were economically exploited by American companies such as the United Fruit Company (now Chiquita). Typically, banana republics have extremely divided social classes, usually a large poor working class and a ruling class of plutocracy consisting of business, political and military elites. The ruling class controls the primary industry by exploiting the labor force. Therefore, the term "banana republic" is a pejorative description of a slaveholding oligarchy that abets and supports the exploitation of large-scale plantation agriculture, especially banana cultivation, for kickbacks.
A banana republic is a country that practices a state capitalist economy, according to which the state is operated as a private commercial enterprise to seek exclusive profits for the ruling class. This exploitation is achieved through collusion between the state and favored economic monopolies, in which the profits from private development of public lands belong to private property, while the resulting debts are the responsibility of the public treasury. This unbalanced economy is still limited by the imbalance of urban and rural economic development, and usually reduces the national currency to a devalued banknote (paper money), making the country ineligible for international development credits.
The "pre-mined ICO" mentioned by Adam Back refers to a way of launching blockchain projects that is generally believed to have been pioneered by the advent of Ethereum in 2015, that is, by pre-mining a batch of zero-cost tokens and then selling them to the market (called ICO, initial coin offering) to finance the project launch.
![](https://img.jinse.cn/7231837_image3.png)
Some netizens said, "Bitcoin is also pre-mined." In response, Adam Back laughed and said, "Of course not."
Here is a brief explanation. Although some people often switch concepts and say that the 1 million BTC mined by (suspected) Satoshi Nakamoto in the early stage is essentially the same as the pre-sale of ETH by the Ethereum team, Satoshi Nakamoto mined BTC at a cost but it was very low. The Ethereum team also put in a lot of effort in the early preparations, so pre-mining ETH is also fair and reasonable. In fact, the key is not the effort behind these BTC or ETH, but whether there is a pre-sale, that is, ICO.
Some people say that this pre-sale is a sales behavior of equal exchange, not a financing behavior. Wrong. The pre-sale pricing includes not only the cost it has incurred plus a reasonable commercial profit, but mainly includes the premium for future expectations, which is created by future efforts. Therefore, the sale of ICO tokens is closer to the company's equity financing behavior, rather than ordinary commercial sales behavior based on equal exchange such as selling steamed buns.
Satoshi Nakamoto never conducted an ICO for Bitcoin. Satoshi Nakamoto's BTC was neither minted at zero cost nor sold. This is the most significant difference between BTC and ETH at the moment of creation.
From the perspective of US securities regulations, ETH pre-sold by ICO is definitely a security. ETH that earns interest through pledge is also a security. Only ETH mined by PoW mining in the past few years is a commodity. Now that these ETH are mixed together, it has become a fish in troubled waters. The US SEC is also unable to distinguish between these ETHs of different natures, and in approving the ETH ETF, it simply made a "gourd monk's random judgment on the gourd case".
Some netizens advised Adam Back to stop shouting, after all, ETH is already a second-best blockchain project.
In response, Adam Back has a firm attitude. He said: "In fact, it is a hot piece of junk. But novice users often confuse the difference between utility and investability. Bandwidth is useful, but it is cheap, and as technology advances, the price will get lower and lower. Similarly, air is free, and you will die without air. Nothing is more useful than this!" The original netizen persisted: "I think if we can find a way to bottle air and sell it, we will treat it like water... As far as I know, there are many water ETFs." Adam Back responded: "There is a reason why some people call junk coins "air tokens". Those are things that are sold to leeks with no investment value." Another netizen supported Adam Back: "Bees will not argue with flies why honey is better than feces. "Silver can never replace gold" - Carnegie, 1891." Jiaolian searched for the price of ETH at that time ICO sales information. The sales price at that time was in the range of 1 ETH = 0.000508 BTC ~ 0.000746 BTC.
![](https://img.jinse.cn/7231838_image3.png)
Take a look at the current secondary market. 1 ETH is approximately equal to 0.05456 BTC. In the past 10 years, in terms of BTC, there has been a nearly 100x increase compared to ICO.
However, the current ETH/BTC exchange rate is similar to the level at the end of 2017, 6 or 7 years ago. It is still a long way from the historical high of 0.1228 at the beginning of 2018.
After the top of the bull market in 2021, the exchange rate of ETH/BTC only returned to 0.08836 at most, and failed to return to the historical high in early 2018.
According to today's BTC price of about 69k, if ETH/BTC returns to its historical high of 0.1228, its price should be 8473 dollars, which is more than double the current 3760 dollars.
This article is not to tell you a simple conclusion of right and wrong, but to inspire readers to think independently.
George Soros is said to have a famous saying: "Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend and step off before it is discredited."