April 18, 2022: Updated to reflect current market value statistics and Ethereum’s supply chain.
When it comes to cryptocurrencies, the most popular currency after Bitcoin is Ethereum. Ethereum was first launched in 2015 and is the second largest cryptocurrency. It accounts for 18.4% of the total capitalization of the cryptocurrency market (through CoinMarketCap).
Despite being described as ‘Altcoin’, Ethereum is quite different from Bitcoin. In addition to using a participatory test (PoS) algorithm instead of Bitcoin’s performance test (PoW), the Ether Summit is different from Bitcoin.
Here’s everything you need to know about Ethereum’s overall offering and any future changes.
Does Ethereum have a maximum limit?
Unlike Bitcoin, Ethereum has no restrictions on its total volume. There is a maximum limit for Bitcoin of 21 million, but these restrictions do not apply to Ethereum. More than 120,426,128 ETH will be in circulation from April 2022.
Undoubtedly, there are always some limitations on the Ethereum server, which means that it would be wrong to say that it has a “limited server”. It has a limit of 18 million ETHs per year (or 2 ETHs / block), 25% of Ethereum’s initial supply. These limits correspond to the Dogecoin limit of 5,000 DOGE per year.
Vitalik Buterin, the founder of Ethereum, explained this decision in the Ethereum Whitepaper:
The growth model of the permanent linear offering reduces the risk of what some come as an excessive concentration of wealth in Bitcoin, and gives people living in the present and in the future a reasonable opportunity to acquire monetary units while at the same time maintaining a strong incentive to achieve and maintain it because the “supply growth rate” in percentage always stays zero over time. We also theorize that currencies are always lost over time due to waste, death, etc., and the loss of money can be modeled as a percentage of the total offer per year, the total foreign exchange offer in circulation will eventually stabilize to a value equal to that annual emission divided by the loss percentage (for example, at a loss rate of 1%, when sumministro reaches 26X, it will be deducted 0.26X and will lose 0.26X each year, creating an equilibrium).
Without hesitation, some changes should be considered in the near future in Ethereum.
Future limits in the Ethereum add-on
On April 1, 2018, Buterin announced an Ethereum Improvement Proposal (EIP) that would limit funding to 120,000,000 ETH. If many people see this as an April Fool’s broth, Buterin explained. Gorjeo it was a “meta-bromine” that would be worth considering seriously.
Although this limit has not yet occurred, the next update to EIP-1559 has important improvements for the Ethereum server.
Scheduled for launch in July, EIP-1559 will mark a change in the way Ethereum transactions are handled and paganized. In terms of its impact on the Ethereum supplier, Ethereum, which is traditionally sent to the miners as part of this transaction, will be sent to the network and ‘quenched’. In theory, this would prevent Ethereum’s inflation to the extent that more transactions are generated and more Ethereum is consumed, instead of going to cryptomoned miners.
As explained on the GitHub page of EIP-1559, Ethereum has the potential for reverse deflation:
If it earns more at the base rate than what is generated in mining revenue, ETH will be deflationary, and if it generates more in mining revenue than desired, then ETH will be inflationary.
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[Featured Photo by Executium on Unsplash]
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