Ethereum’s inflation rate has been under scrutiny over the past year as Bitcoin has seen its halving. Many Bitcoin-oriented investors in this space criticize the number of changes that have been made to the ETH issuance, including the ice age dissolution (which increases the issuance) and the implementation of Proof of Stake over Proof of Work.
Vitalik Buterin, founder of the blockchain, recently highlighted his thoughts on issuing and deploying the cryptocurrency in a recent Reddit thread. He replied to a question he was asked in an Ethereum foundation: “Ask me something”.
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Vitalik Buterin talks Ethereum supply and inflation
When asked about the maximum offer to ETH, Buterin responded by pointing out that Ethereum could indeed be deflationary once the ETH2 upgrade is fully activated in a few years time:
“The emissions plan is ~ 4.7m per year for the next ~ 1-2 years or how long it takes to merge, and then ~ 0-2m per year minus the fees burned (which could be even higher than the emission!) Once PoS is completely available. I don’t think it’s productive at all to give another answer. Still, I hope the fact that the phase 0 code is done and basically just waiting for people to deposit makes the transition compared to e.g. six months ago! “
He added that the short-term concerns about Ethereum’s current economic rules are somewhat short-sighted as investors should consider where the network is going, not where it is:
“In two years the main task will be to stabilize and appreciate what we have built. Until then, participating in Ethereum is, in part, inevitably a prediction that the roadmap is good and that once this upgrade process is complete, we will actually get to a place where the network is efficient and stable, powerful and the basis for significant data can be parts of the world economy. “
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ETH2 status update
Some updates were made to ETH2 in the same Reddit thread.
Ethereum Foundation researcher Danny Ryan told an AMA participant that the parameters can be adjusted if the ETH2 contract does not receive the required deposits in time for launch.
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Featured image from Shutterstock price tags: ethusd, ethbtc charts from TradingView.com Ethereum Foundation Vitalik Buterin talks about ETH’s inflation rate
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