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I’m not sure it’s as easy as a yes or no question. I think it’s fair to say that yes, ETH *can* be used as money, but that using the term money to define ETH is far too limited and misses much of what makes ETH actually important to the world today.

I’m going to stretch a metaphor here, so apologies in advance. I’d like to go back to the days where gold coins were used as money. At that time you could find gold in the form of coins (definitely money), but you could also see it used in the jewellery of the upper classes. Is a necklace money? I would argue that it’s not. Is gold itself money? I would argue as a raw material that it is not. Can gold be turned into money? Yes. Can a gold necklace be turned into money? Again, yes. But I don’t think defining gold exclusively around money is the best way of describing gold or its use cases. (I chose gold as the analogy here instead of oil as a barrel of oil hasn’t regularly been traded directly between folks).

I like to think of ETH as a raw material that can be used and shaped into different forms. Currently, very few things in the open market can be paid for with crypto, that’s slowly changing, but it certainly hasn’t replaced fiat anywhere. The price of ETH is based on speculation more than actual use cases as well. And the speculation of its future rise in price (at least in my opinion and understanding) is based on the fact that it will be needed as gas to power dAPPs that will be legitimately useful in the world to come.

ETH can be money, but what makes it unique is definitely not that fact. The heart of ETH is something much more interesting than that.

Well, as mentioned below by @ashley sutherland

ether is money. It is:
1) a store of value
2) can be used to pay for goods and services
3) can be used as a unit of account

To expand on this a little further and consult some more economic theory ETH is a nearly perfect money because it answers to all but one criteria;

  • Is it divisable? yes into 0.000000001 ether aka 1 Gwei.
  • Is it portable? yes because of it’s digital nature it captures this criterium extremely well. Carrying a gazillion eth in your pocket does not wear you down any more than carrying 1 Gwei of eth. Fundamentally this is because it is just made out of numbers that behave according to protocols and trying to quantify the weight of numbers is like trying to weigh sound.
  • Is it durable? yes because it makes use of an underlying blockchain architecture it is assumed to last while we have electricity to run a machine.
  • Is it fungible(interchangeable)? yes it also meets this criteria because a unit of eth will always equal that same unit of eth because MATH.
  • Is it scarse? Well technically it isn’t since there is no eth cap, albeit there is a set inflation rate it does not have a limited supply, thus it isn’t scarse like for example Bitcoin is.
  • But to be frank neither classical nor fait currency has ever met the scarcity criterium. It almost always went into an inflationairy cycle to pay for warmongering and imperialistic fantasies. So the question arises is scarcity needed for a well functioning currency?
    We do not know yet and many economic schools have debated this issue for centuries.
    My take on it is that the only thing needed for a “sound” money is besides the trust of the people using it, it needs to be highly functional as in it need to have a strong utility basis. While the more educated the users become the more likely it is that they will demand and operate with a money that increases their capacity to do cool stuff with it. Hence we come back to the near infinite possibilities granted by virtue of ETH being not Just a money but a mechanism that allows you to operate (within the bounds of the protocol) a global super computer that can execute business logic, cutting down on legalize needed to establish an organisation and allowing anyone from across the globe to contribute to the little ecosystem you created in the process of using this new form of programmable money, et cetera et cetera. As we are just now figuring out what this all means to the world as a whole this question is very interesting to say the least!


I would agree with the above but with one major issue. If ETH does not get network liquidity around the world (This applies to BTC too) Then no matter the properties it will not become MoE


Please specify what you mean by network liquidity?
If by it you mean network inter-operability which creates more liquidity, then I see beatable problems for eth and to a lesser degree bitcoin because of the works that kyber, cosmos, komodo, chainlink, bancor etc are doing to connect chains.

If by network liquidity you mean the amount of settled transaction volume I take your point that it is not (yet) comparable to the global financial daily settled amounts.

If by network liquidity you mean the blocktime or settlement times of these respective chains I see this as a temporary technical hurdle, and I am (maybe naively) positive that this will be overcome in the future.

Also because of the fact that DLT’s form a fundamentally more capable financial or even technological system it will get used more and more over time because of the achievable economic efficiencies and incentive alignments that can be integrated into these systems.

Could you also specify what you mean by MoE? if it was meant to spell money I must disagree with you on this because as I’ve stated in my initial response I believe it already is and will behave as such until we lose access to electricity. whether it will find mass adoption is a separate issue but as I alluded to before I believe that business are in a sense out to gain a competitive advantage over their competitors and hereby creating pressures to adopt favorable technologies and I firmly believe DLT’s are a favorable new technology.

No. ETH is fiat currency. It isnt based on a tangible commodity, like gold. It’s like a fart in the wind. You only capitalize on it if you breathe it in while it lingers. ETH is more like a programming language for decentralizing the world of computing power. Because affordable computing power is in high demand, ETH can capitalize on that market, acting as a tangible currency, when in fact, it is just a means to an end. In that regard, it could be money, if people would see money for the intangible qualities it has. But, as long as the dollar is deified as such, ETH will never be money.

Ether, or ETH, is Ethereum’s native currency. It is “digital money” that can be sent over the internet instantly and cheaply, and also be used in many Ethereum-based applications.

The easiest way to get ETH is to buy some. There are many cryptocurrency exchanges that will allow you to buy ETH, but the one you should use will depend on where you live and how you want to pay.

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