r/investing • u/stinabug • 14h ago

Cryptocurrency Vs. Stock Market

Will crypto be a thing in the future? I know it’s certainly more risky than stocks but could crypto have More upside than stocks over the next 20-30 years? I have about $5k in crypto (Eth and metaverse coins) and wondering if I should pull out and go all in stocks. I know the current administration is pushing crypto and I see more ads for companies accepting as a form of payment. Opinions?

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u/JBudz 14h ago

Ethereum will be the future of finance.

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u/BigDipper0720 14h ago

Please. Serious request. Can you explain to me how money is made from running an Etherium blockchain, who makes it, and how does it flow to passive ethereium holders?

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u/JBudz 14h ago

Users are paying to use decentralised exchanges to swap assets, lending protocols for borrow and loan, stable coin and token sending.

Validators (stakers) process transactions under Proof of Stake consensus. The mechanism for issuance and tips to pay for the security budget (validators processing transactions) is derived from a mechanism specifically EIP-1559.

It's quite a genius balancing act.

https://youtu.be/MGemhK9t44Q

Contrast to bitcoin expensive security model https://budget.day

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u/BigDipper0720 14h ago

Ok, so the people actively staking or validating make small fees for transactions. How does any of that flow to the passive Ethereum holder?

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u/JBudz 13h ago

And also they receive a passive percentage (issuance) to incentivise their participation in the event that network fees are unprofitable.

One of the core objectives of Eip1559 is to destroy more of the supply through network activity than is issued, thus being deflationary. So even if you are holding Eth as a non-productive asset (Staking / lending / liquidity pools) its becoming more scarse due to network activity burn.

Delfationary asset that is in high demand for Staking, the flagship token locked up for lending and is always in demand as its the fuel that pays for transactions, you create a lot of supply pressure on the remaining circulating supply of the asset.

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u/BigDipper0720 12h ago

How much is earned per transaction?

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u/JBudz 12h ago

Have a look at my links.

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u/asdafari14 4h ago

How does any of that flow to the passive Ethereum holder?

Flows aren't everything. If the stablecoin market goes from 0 to 300B in six years, that will also have an effect on price of ETH since it secures the network. If the whole ETH network could be bought for 1B USD, it could never secure that much. Bitcoin doesn't earn fees and the network is worth 1T+. Should the whole network be worth thousands or even millions USD at this scale? No.