On Monday, June 11, the second by the capitalization Ethereum overcame an important historical milestone: the total number of ETH coins issued exceeded 100 million.
Unlike Bitcoin, whose number of units is limited to 21 million coins, the developers of Ethereum did not set such a limit for their cryptocurrency, and for many years this caused the community’s concerns in terms of possible inflation.
It is noteworthy that as early as 2016 the founder of Ethereum Vitalik Buterin, after making certain calculations, predicted that the amount of ETH in the foreseeable future will not exceed 100 million – at least not in this century. However, subsequently, the developers’ plans changed.
Probably doubting his previous forecast, in April 2018, Buterin published a new proposal for improving Ethereum (EIP): to limit the total number of ETH to 120 million units.
“To ensure the economic sustainability of the platform with the maximum range of possible situations, and also in the light of the fact that the production of new coins is no longer effective for promoting the egalitarian spread of coins or some other significant strategic goal, I propose that we agree to limit the total amount of ETH,” wrote then Buterin
His proposal was to set the maximum amount of ETH in the amount of 120 million, i.e. as exactly 2 times more than it was sold during the ICO project, but it was not accepted, and today the emission of cryptocurrency is still unlimited.
As the newspaper notes, the number of issued Ethereum coins is growing by about 10% per year. The first Ethereum block was generated in 2015; at that time the network already had 72 million coins. This means that the remaining 28 million ETH were produced within approximately 3 years after the public launch of the network.
In an attempt to solve the problem of inflation, a number of other solutions were proposed, but none of them was implemented either. Nevertheless, even if the proposal of Buterin will not be accepted, there still remains the possibility to limit the number of Ethereum coins – this is supposed to be facilitated by the adoption of the Casper protocol.
The proposed transition to the Proof-of-Stake algorithm, Casper, is expected to reduce the current level of inflation from 10% to 0.5% per year, but the date of its implementation has not yet been determined. If by that time the number of ETH in circulation exceeds the limit of 120 million, Buterin proposes an option with an emission limit of 144 million.