Vitalik shifted the argument for the value of Ether towards network survival and digital property rights; the fee burn is retained but cannot serve as a reliable valuation floor.

Written by: Daii

Imagine two types of structures for preserving wealth. Bitcoin is like a vault with a limited number of slots defined by rules, where trust mainly comes from the fact that no participant can unilaterally create compliant slots; Ethereum is like a continuously running financial city, where ledgers, applications, and assets operate, and the city must continually patch software and security facilities. Upon returning to the mechanism, the former relies on a fixed issuance path and proof of work, while the latter relies on dynamic supply, proof of stake, and a multi-party coordinated upgrade process. (Bitcoin.org Halving Explanation; Bitcoin Whitepaper; Ethereum Governance)

Vitalik Buterin, commonly referred to as "V God" in Chinese, adjusted the focus of the value argument this time. Ether (ETH) is the native asset of Ethereum, used to pay network fees and act as validator collateral; his public statements did not cancel the burn, establish a fixed total supply, or directly modify the protocol. (The Block; Ether Use Explanation; Ethereum Governance)

1. The burn mechanism is retained, valuation floor is withdrawn

Ethereum Improvement Proposal 1559 (EIP-1559) is the fee rule enabled in 2021: the protocol calculates the base fee according to congestion levels and burns it, with users paying an additional priority fee to block validators. It affects how much users pay in fees and also impacts the net supply changes faced by all holders. (EIP-1559 Specification; Ethereum Issuance Explanation)

The old narrative analogizes the burn to company repurchases and further calculates token value with "annual burn divided by discount rate." The example Vitalik provided is: if $1 billion is consistently burned each year, with a discount rate of 4%, the result would be $25 billion; his counter-argument is that historically high transaction fees largely come from the prosperity within the crypto market, and asset prices, trading heat, and burn income may decline simultaneously; therefore, this is not a floor that does not move with market conditions. (The Block)

The accurate stance in the report is: even if the fee burn is long-term below "the necessary level to offset new issuance" of 10%, holders do not have to be disappointed. It does not say that the burn only accounts for a certain established proportion of actual new issuance, nor does it form new protocol parameters; issuance depends on the size of staking, and burn depends on network usage, both jointly determining net supply. (The Block; Ethereum Issuance Explanation)

2. "Value storage" stores verifiable future choices, not price guarantees

Here, "value storage" is a claim to be validated: an asset that can still be recognized, verified, transferred, and accepted years later may help holders preserve purchasing power and options; it does not guarantee stability in USD price, nor does it ensure that ETH will necessarily achieve this. Scarcity or issuance discipline, verifiability, security, liquidity, and long-term social acceptance must all continue to exist; the label itself cannot compensate for any of these items. (Bitcoin.org FAQ; Ethereum Foundation Mission)

The Ethereum Foundation collectively refers to key attributes as CROPS, which stands for Censorship and Capture Resistance, Open Source, Privacy, and Security, respectively, indicating resistance to censorship and capture, open-source, privacy, and security. Its function in this topic is to limit who can block transactions, alter property rights rules secretly, or force users to rely on a single intermediary; these conditions directly affect whether readers can verify balances, control assets, and exit in adverse systems. (Ethereum Foundation Mission)

Vitalik lists "survival" as the primary indicator of value storage and includes lightweight nodes, client diversity, anti-censorship design, privacy tools, post-quantum security preparation, and moderate hardening of the base layer in this argument. The logic is: low-config devices can verify data, reducing dependency on a single service provider; multiple independent clients can lessen the impact of the same software vulnerability on the entire network; post-quantum preparation and restraint from adding new features address future cryptographic threats and governance power expansion, respectively. (The Block; Light Client Explanation; Client Diversity Explanation)

The maturity of these projects cannot be mixed. Light clients aim to enable low-config devices to verify external data with proofs, but the official page still states that the implementations listed have not yet been considered production-ready; client diversity can be observed already, but it requires real-time panels, and historical snapshots from web pages cannot be treated as today's distribution. (Light Client Explanation; Client Diversity Explanation)

3. ETH is simultaneously a fee asset, collateral, and pledge

Ethereum uses proof of stake: validators stake ETH, check blocks, and participate in consensus formation; being offline causes them to miss rewards and incur small penalties, while signing conflicting blocks or other provable violations triggers forfeiture. Therefore, ETH is both a network fee asset and collateral that restrains validator behavior; it can also act as collateral in third-party applications, but specific risks and liquidation rules are determined by the respective application. (Ethereum Staking Explanation; Proof of Stake Technical Explanation; Ether Use Explanation)

This brings the reflexivity of price and security. With other conditions remaining constant, the higher the ETH price, the higher the dollar cost to acquire and risk a certain amount of staked assets; if a technical incident or governance mistrust causes the coin price to decline, this dollar cost will also decrease. This is a risk relationship derived from "security collateral priced in ETH," rather than a single-variable prediction of attack difficulty or market price. (Proof of Stake Technical Explanation; Ethereum Staking Explanation)

Staking rewards are not company profit dividends. Rewards include protocol issuance and transaction-related income, with participants also bearing offline penalties, forfeitures, and operational risks; staking pools and liquid staking increase smart contracts, operators, custodians, or governance layer between protocol and users. When new issuance flows to stakers, the supply proportion of non-staked holders will be diluted, and the pooling scale may exacerbate the concentration of verification rights. (Ethereum Issuance Explanation; Ethereum Staking Explanation; Pooling Staking Explanation; EIP-8363 Draft)

4. Two monetary constitutions under the same goal

Bitcoin's issuance rules are narrower: block subsidies halve every 210,000 blocks, approximately every four years, with a total cap of 21 million coins; nodes reject blocks that do not conform to their rules. Miners participate in proof of work using computing devices and power, cumulatively calculating work to help the network determine transaction history; as subsidies decline, transaction fees are expected to gradually bear more security budget. (Bitcoin.org Halving Explanation; Bitcoin.org FAQ; Bitcoin Whitepaper)

Ethereum does not have the same fixed total supply commitment. Validators earn new ETH, while base fees burn ETH; net supply changes with staking size and network demand; protocol changes must also go through proposals, discussions, modifications, implementations, testing, inclusion in upgrades, and mainnet activation. Ethereum Improvement Proposal 1 (EIP-1, which stipulates how proposals should be recorded, discussed, and strive for consensus) also explicitly requires authors to establish consensus and record dissenting opinions, and Vitalik's statements cannot change rules unilaterally. (Ethereum Issuance Explanation; EIP-1 Process; Ethereum Governance)

Therefore, both pursue a similar non-sovereign value storage goal but under different insurance conditions. Bitcoin mainly bets that the supply path and verification rules are difficult to change; Ethereum mainly bets that the system has the capability to upgrade, while maintainers, validators, applications, and foundations cannot recklessly rewrite property borders. The rigidity of rules has long-term security budget issues, while upgradeability increases software complexity, coordination failures, and governance capture risks. (Bitcoin.org Halving Explanation; Ethereum Governance; Ethereum Foundation Mission)

5. Network utility is still insufficient to demonstrate that ETH captures all value

Stablecoins and tokenized real assets can bring settlement or collateral demand to Ethereum, but their reserves and cash flows belong to their own legal arrangements. The Ethereum protocol does not grant ETH holders the right to claim these assets; thus, the demand for ETH generated is an indirect effect, which may also be diverted by applications, stablecoins, other tokens, or expanding networks. (Ether Use Explanation; Ethereum Foundation Mission; The Block)

Readers can verify the next claim that "ETH has become a store of value" with three public records: first, check the status of the proposal page to distinguish between drafts and activated rules; next, separate validator issuance and base fee burn to avoid only showing one side; finally, enter the real-time panel listed on the official client diversity page, recording the data date, identification method, and whether any single client has crossed the risk threshold. This task does not require holding, staking, or trading any tokens. (EIP-1 Process; Ethereum Issuance Explanation; Client Diversity Explanation)

The protocol allows asset transfers, but it does not mean that compliant purchasing, trading, or staking access is provided in all regions; platforms may still restrict accounts based on identity, region, and local rules. After completing the verification of the above public information, readers will have a verifiable assessment of the three claims of "supply discipline, network survival, value capture," not a price conclusion for ETH or Bitcoin, nor an entry recommendation. (Bitcoin.org FAQ; Ethereum Governance)