From the perspective of interest-bearing assets, Bitcoin and Ethereum

On November 19, an online release featured Dan Bin's recent public speech.

In this speech, Dan Bin specifically mentioned gold, Bitcoin, and Tesla.

Regarding gold, Dan Bin mentioned (the gist is):

If we look at the long historical cycle, gold, as a non-yielding asset, cannot outperform yielding assets (such as stocks), and a time-return chart is used to compare the return curves of the two.

Seeing this statement, I am reminded of a passage by Buffett in his shareholder Q&A (the gist is):

He cited a famous European painting as an example, mentioning that if an investor had bought this painting in 19XX and held it until today, what would be its price; at the same time, another investor used that money to invest in a U.S. stock index fund at the time, and what would that fund be worth today. In comparison, the return on the latter is far higher than that of the former.

So Buffett's conclusion is also: from an investment perspective, over the long term, the return on investment for non-yielding assets cannot compare to that of yielding assets.

This conclusion is similarly applied by the old gentleman to gold.

Next, Bi Ben mentioned Bitcoin and Tesla, and his following point triggered me to summarize and review some previous viewpoints.

His point of view (in essence) is:

Even if Bitcoin can rise to $1 million in the future, he believes that compared to Tesla, the latter can bring greater value and potential. Therefore, in the long run, the returns of the latter will be higher than those of the former.

His starting point of logic is also: Bitcoin does not generate interest, while Tesla does, and it can yield huge returns.

In my view, there is a point in his perspective that will cause controversy: whether Tesla can truly realize Musk's vision in the future and whether it can really implement the business scenarios he envisions.

But I think this point of contention is not important; it is not the core of this comparison.

The core of this comparison is that the future appreciation potential of Bitcoin, a non-yielding asset, is limited; it cannot match yielding assets ------ this has sparked a review and summary of some past viewpoints.

Regarding Bitcoin as a non-interest-bearing asset, I am increasingly agreeing with the viewpoints of some traditional investors, including Dan Bin, that its investment returns cannot compare to interest-bearing assets.

But I am different from them, the biggest difference is:

When they try to find an income-generating asset with greater upside potential than Bitcoin, their primary and seemingly only target is stocks in the traditional sector.

But I am different; my primary goal will focus on assets within the crypto ecosystem (of course, I will also pay attention to stocks in traditional fields).

In an article from a long time ago (around 2022 or 2023?), I first shared a viewpoint:

I believe that the market value of Ethereum will surpass that of Bitcoin in the future. The fundamental reason is that Ethereum, as an application platform, can generate sustainable and healthy (transaction fee) revenue, which can be redistributed to token holders through token burning.

However, at that time, this viewpoint actually lacked some data and technical support, with several key aspects including:

At that time, the throughput of Ethereum was still too small; how could its performance support a large application ecosystem?

(Based on the technology architecture at that time) When the price of Ethereum is too high, even if a large number of applications can run on it, such high transaction fees will definitely hinder the promotion of applications. In this case, how can a massive application ecosystem be established?

(With the technology architecture at that time) If we purely enhance the performance of Ethereum, will it severely compromise decentralization? If we want to maintain decentralization, how can we improve the performance of Ethereum?

Now looking at these key issues mentioned above, it can be said that after years of effort, especially the acceleration efforts of the Ethereum core development team this year, most of these issues have basically found relatively mature and practical solutions.

Based on layer 2 scaling, zero-knowledge proofs, and the EIL scheme, the future of Ethereum can continue to significantly enhance the performance of the entire ecosystem (L1+L2) while maintaining decentralization, all at a lower cost, and continuously reduce the fees at the application layer:

• Transaction fees will no longer be an obstacle to application promotion;

• The vast ecosystem can continue to expand based on improved performance and reduced costs;

• Decentralization will not be compromised by performance improvements.

Combining the current development status of Ethereum with the viewpoints I agree with that Dan Bin mentioned in this speech,

• I now believe even more that Ethereum's market value will surpass Bitcoin's in the future.

• And it is believed that in the future, Ethereum is very likely to generate greater investment returns than Bitcoin in public chains that can support smart contracts.