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Why didn’t they create more eth as part of this change to offset that issue? Also does eth supply increase forever or does it have a hard coin limit like btc?
by mrfusion 5y ago
Why didn’t they create more eth as part of this change to offset that issue?
Also does eth supply increase forever or does it have a hard coin limit like btc?
- somebodythere 5y agoETH stakeholders want ETH to go up so a change that minted a bunch more ETH in relation to PoS would probably be contentious. Currently no hard cap on issuance, 2 ETH are minted every block, but ETH burn rate is expected to outpace issuance post-POS.
- tromp 5y agoEth keeps getting generated forever but at the same time a portion of transaction fees gets burned, so whether coins in circulation grows depends on transaction volume and fee levels.
- nostrademons 5y agoIt's complicated, and basically comes down to Vitalik's observation that "Ethereum is a currency in service of a protocol, while Bitcoin is a protocol in service of a currency." Basically the Ethereum devs set the economics to incentivize the correct behavior from players in the ecosystem, and this can be either inflationary or deflationary depending on gas prices, network usage, amount staked, etc. It's responding to the supply & demand for computation on the network. For most of its history Ethereum was inflationary. It flipped and became deflationary a couple months back, and not coincidentally the price started rising again. It's likely to be significantly deflationary under Eth 2.0 with expected transaction and staking volumes.