The Shock: The Last Ethereum Coin Does Not Exist!
Ethereum ETH has hit a new milestone as earlier today the cryptocurrency’s total supply crossed the 100 million mark: this means there is more than 100 million Ether in circulation. Unlike Bitcoin which has its supply capped at 21 million, Ethereum has opted not to set an upper limit on its total coin supply.
Demand and Supply For Dummies Like Us
Demand of anything, imagine fabric depends on a lot of factors, like the features of the fabric, the taste of people, the kind of application, trends, seasons but mostly and basically people’s willingness and ability to buy it at a price point.
Supply is the producers willingness and ability to produce it at a price point. When supply and demand equate at a price, the fabric will be sold, to those demanding people, at that price, by the willing producer.
This applies to everything, almost. Especially to currencies such as Ethereum, Bitcoin, USD and what not. Well sometimes the currency is pegged, but why complicate things when simple explanations could suffice.
No Cap Means Loss For You? Well, it could.
No cap on the supply of Ethereum means that when demand rises, too much, which is, the currency will start to get expensive, the expensive currency’s value may not increase as much as its demand creating a bubble. The inflationary bubble will pop and the system will face a serious loss of money/value/currency. This will make a lot of people very very sad.
This Year Ethereum’s Supply crossed 100M
This raised concerns on the issue that whether the Ethereum consensus cares for its users at all or not! Well, that damage can still be controlled by the implementation of a miracle called the proof of stake consensus protocol or the more famous Casper protocol of Ethereum.
Casper protocol is expected to reduce the current inflation rate of 10 percent to between 0.5 to two percent per year, but if it will be done and when will it be done, are big questions of time!
Conclusion: Vitalik Buterin Lied To Us!
Back in 2016, Ethereum co-founder Vitalik Buterin projected the supply won’t cross 100 million in the foreseeable future – not until the next century at least. Clearly, something with his calculations went amiss.
To prevent the inflation and a bubble bursting like the misfortune of the housing market crash Vitalik Buterin brought in an Ethereum Improvement Proposal (EIP) in April 2018. Vitalik said in the proposal:
I recommend setting a maximum supply of 120 million, or exactly twice the amount of ETH sold in the original Ether sale.
It temporarily put all the cry babies and commentators to bed, but this year, in the summer, the supply crossed 100M. EIP has not yet been accepted (seems like it will not be) and the network’s supply remains uncapped, untouched.
People have gauged since then that the cap was not put in which makes Vitalik a liar. Too bad for a founder of a currency, for a man his reputation, it sucks right! Tip: Don’t promise what you can’t deliver or the world will call your trick in sucker!
Where are all the good people now?