For a long time, cryptocurrencies have tried to present themselves to society as an alternative to traditional Fiat money. An attempt to return control over finances to the consumers themselves, through decentralized virtual currencies that are impossible to manipulate. However, sometimes a certain centralization is introduced in some cryptos. For this reason, Ricardo Spagni accuses Ethereum of copying the Federal Reserve in the Tweet of the day:
The Federal Reserve and Ethereum
Since its inception, cryptocurrencies have been declared enemies of the Federal Reserve in particular, but of all central banks in general. Well, the explicit goal behind the creation of Bitcoin by Satoshi Nakamoto. It was to prevent any government or financial institution from having full control over the currency that citizens use.
Thanks to this, Bitcoin introduced Halving and the limit on the issuance of BTC, as a resource to avoid excess supply and inflation in the currency. However, other cryptocurrencies like Ethereum decided to take a different path when it comes to regulating their liquidity in the market.
Thus, in the case of ETH, it is the Ethereum Foundation itself that is in charge of setting an inflation target on the Blockchain. Adjusting the difficulty of mining and therefore the emission of Ethereum within the crypto market. Following the techniques used by the Federal Reserve to control the number of dollars in circulation. Reason why crypto influencer Riccardo Spagni accuses ETH of copying the Federal Reserve:
“ETH’s commitment is to minimize emission as much as possible. Congratulations, you have reinvented the Federal Reserve“
Thus, Spagni would note that with the control he has over the monetary issue on the Blockchain, Ethereum would be copying the operation of the Federal Reserve. In what would be a contradiction with Blockchain values such as decentralization, and democratization in financial management.