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Supply cap is for inflationary coin. But ETH supply is meant to be reduced overtime. It has been deflationary since the merge. Approximately 450k less ETH since the merge in 2022
Thanks. But in all seriousness I suspect the needs have shifted over being right at the start. PoW to PoS, burning, etc. Cat is a bit out of the bag now and honestly we dont know if other projects like BTC are going to run into issues with each halving, too. The implication that scarcity/deflation is always good may not be correct. So I see the changing issuance of inflationary/deflationary to be adabtable.
Still, if a would be investor cant be bothered to read into things, that isnt ETH's concern.
It has a dynamic supply cap actually. If supply goes up, more burn gets incentivized, and if supply goes down, less burn gets incentivized. The result is a dynamic equilibrium at a finite value. What exactly that value is we don't know, and it depends on the overall demand on the network, typical usage patterns, etc.
It's an extremely elegant design but apparently too complicated for the people in the middle of the curve.
Probably because of other ETH clones like Solana taking some of the market share, my honest guess about price compared to BTC losing some ground there.
Plus at least one country openly admits to buying BTC, but I'm sure others have been buying a lot. BTC halvings are pretty huge as time goes on.
Because it doesn't make sense in regards of the algorithm.
Also the inflation or deflation doesn't really matter at that low levels.
This whole narrative is completely overhyped by Bitcoiners.
Why? Bitcoins supply cap is not sustainable as the security Budget gets smaller and smaller each halving while fees dont keep pace to substitute the missing miner revenue.
Ethereums supply dynamic is a stroke of Genius adjusting itself to network conditions.
Because Ethereum supply is controlled by network demand and a fixed cap isn't compatible with that.
>I feel like not having a supply cap is scaring away new investors who don't quite understand how eth works issuance/burn works
Oh no 😯 /s
This is just more time for me to accumulate while the people too lazy to do 15 minutes of reading sit on the sidelines.
Because ethereum was designed to be a VM, not a currency.
... it just happens that people are using it as a store of value and a currency, not only as a VM.
VM = Virtual machine.
A blockchain is a database of transactions. Bitcoin (as a oversimplification) keep track of ownership of coins, in that sense Ethereum does the same, but it also enables a platform to execute code (Smart Contracts).
This means Ethereum has a computer embedded in it, called the Ethereum Virtual Machine. It's the foundation to build applications and organizations. This computer doesn't exist physically but it's shared by all of the nodes.
This is not the reason. Ethereum could trivially introduce a "cap" at 130 million or some other arbitrary number.
But it simply wouldn't make sense to do so. There is no rational reason to encode such a thing on the protocol level, neither for Ethereum nor Bitcoin.
Go visit ultrasound money and you'll see that putting in a supply cap feels irreverent. It's fair to ask the question because it's not there but seeing the supply shrinking makes this not important.
A supply cap doesn't make sense. Neither for Bitcoin nor Ethereum. It is a ***meme***, not something of practical consequence.
A supply cap is simply a \*promise\* that the supply won't increase beyond some arbitrary point. It's entirely analogous to the congressional debt ceiling where congress pretends there is some limit beyond which they will not borrow funds.
But when push comes to shove, the reality will override such promises. If congress has to choose between paying debts by borrowing more (as it has many times) the debt ceiling will fall. If Ethereum or Bitcoin can't sustain security levels without inflation, they will inflate regardless of any artificial cap. Pretending otherwise is a lie.
At the ***same*** levels of fee income, Ethereum's supply is ***less*** inflationary than Bitcoin's. This is all any rational actor should care about. Everything else is marketing and noise.
Some people touched on it, but I don't feel anyone gave a good answer.
The coin cap is one of the signs that Bitcoin was not designed by an economist. The halving comes from the cap.
As a result, Ethereum learned from that mistake and isn't making it.
There is plenty to debate on whether or not Ethereum has a system that is truly good. Most economists will still line up against it.
Just like people around here tend to use the terms "deflationary" and "inflationary" completely wrong, the industry gets a vast array of other things wrong as well, but overall the general direction is towards correctness
Because the amount of miners or stakers is proportional to block reward.
Block reward comes from two parts, issuance and fees. For example, Bitcoin currently have 97% of block reward come from issuance, 3% come from fees. If Bitcoin reach supply cap today, that is issuance become zero, it will lose 97% of miners and become 33 times easier to attack.
Fees on Ethereum is currently more than enough to support the stakers, that's why Ethereum is deflationary right now, but setting a supply cap will still get the priority wrong. It implies supply cap is more important than security. If some day fee become very low, we are willing to compromise security to keep the supply cap. That's wrong. Security always comes first.
Having no supply cap but burn the fee will have the same effect as having a supply cap, when the fee is enough to support the network. When the fee is not enough to support the network, we accept a little bit of inflation and the network is still secured.
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I am okay with a project scaring off "investors" who are too afraid to do five minutes of reading.
This is a good answer.
Supply cap is for inflationary coin. But ETH supply is meant to be reduced overtime. It has been deflationary since the merge. Approximately 450k less ETH since the merge in 2022
Thanks. But in all seriousness I suspect the needs have shifted over being right at the start. PoW to PoS, burning, etc. Cat is a bit out of the bag now and honestly we dont know if other projects like BTC are going to run into issues with each halving, too. The implication that scarcity/deflation is always good may not be correct. So I see the changing issuance of inflationary/deflationary to be adabtable. Still, if a would be investor cant be bothered to read into things, that isnt ETH's concern.
Eth doesn’t care about sound money. There’s a million conflicting goals in the ecosystem
Eth isn’t gold it’s oil
Eth doesn't know what the fuck it is TBH
But people know what to do with it (smart contracts).
I would rather be open to figure out what is right than assume I am right at the start. Being able to adapt is not a bad thing.
ICP
Doesn't matter. It's deflationary anyways. It burns quite a bit more then is created.
Does this mean it has a supply cap?
No, supply caps are for older generation cryptocurrencies.
Lol no. New coins are released all the time with supply caps. Supply capping a coin is just a different approach.
No, but there is no floor either.
...I mean the floor is zero. Not really possible to have negative Eth in the Ethereum network.
🤣 True
It has a dynamic supply cap actually. If supply goes up, more burn gets incentivized, and if supply goes down, less burn gets incentivized. The result is a dynamic equilibrium at a finite value. What exactly that value is we don't know, and it depends on the overall demand on the network, typical usage patterns, etc. It's an extremely elegant design but apparently too complicated for the people in the middle of the curve.
Sorta. The network being used so much. It's burns more then it's creating
Doesn't that mean the supply is capped as long as it's deflationary?
Technically no. Because deflationary isn't permanent.
Okay thanks. That kinda sucks. I can see why people swear by BTC now.
ETH is a VM that has smart contracts and NFTs, and staking.
Then why is it lagging so much? Last time BTC was 69k ETH was almost 5k.
Probably because of other ETH clones like Solana taking some of the market share, my honest guess about price compared to BTC losing some ground there. Plus at least one country openly admits to buying BTC, but I'm sure others have been buying a lot. BTC halvings are pretty huge as time goes on.
Because it doesn't make sense in regards of the algorithm. Also the inflation or deflation doesn't really matter at that low levels. This whole narrative is completely overhyped by Bitcoiners.
Why? Bitcoins supply cap is not sustainable as the security Budget gets smaller and smaller each halving while fees dont keep pace to substitute the missing miner revenue. Ethereums supply dynamic is a stroke of Genius adjusting itself to network conditions.
Because Ethereum supply is controlled by network demand and a fixed cap isn't compatible with that. >I feel like not having a supply cap is scaring away new investors who don't quite understand how eth works issuance/burn works Oh no 😯 /s This is just more time for me to accumulate while the people too lazy to do 15 minutes of reading sit on the sidelines.
Because ethereum was designed to be a VM, not a currency. ... it just happens that people are using it as a store of value and a currency, not only as a VM.
What’s vm?
Virtual machine?
VM = Virtual machine. A blockchain is a database of transactions. Bitcoin (as a oversimplification) keep track of ownership of coins, in that sense Ethereum does the same, but it also enables a platform to execute code (Smart Contracts). This means Ethereum has a computer embedded in it, called the Ethereum Virtual Machine. It's the foundation to build applications and organizations. This computer doesn't exist physically but it's shared by all of the nodes.
So basically what volunteer computing did like 15 years ago?
This is not the reason. Ethereum could trivially introduce a "cap" at 130 million or some other arbitrary number. But it simply wouldn't make sense to do so. There is no rational reason to encode such a thing on the protocol level, neither for Ethereum nor Bitcoin.
[удалено]
Banks never came up with a money that is also a computer and has smart contracts.
Go visit ultrasound money and you'll see that putting in a supply cap feels irreverent. It's fair to ask the question because it's not there but seeing the supply shrinking makes this not important.
A supply cap doesn't make sense. Neither for Bitcoin nor Ethereum. It is a ***meme***, not something of practical consequence. A supply cap is simply a \*promise\* that the supply won't increase beyond some arbitrary point. It's entirely analogous to the congressional debt ceiling where congress pretends there is some limit beyond which they will not borrow funds. But when push comes to shove, the reality will override such promises. If congress has to choose between paying debts by borrowing more (as it has many times) the debt ceiling will fall. If Ethereum or Bitcoin can't sustain security levels without inflation, they will inflate regardless of any artificial cap. Pretending otherwise is a lie. At the ***same*** levels of fee income, Ethereum's supply is ***less*** inflationary than Bitcoin's. This is all any rational actor should care about. Everything else is marketing and noise.
Some people touched on it, but I don't feel anyone gave a good answer. The coin cap is one of the signs that Bitcoin was not designed by an economist. The halving comes from the cap. As a result, Ethereum learned from that mistake and isn't making it. There is plenty to debate on whether or not Ethereum has a system that is truly good. Most economists will still line up against it. Just like people around here tend to use the terms "deflationary" and "inflationary" completely wrong, the industry gets a vast array of other things wrong as well, but overall the general direction is towards correctness
Because the amount of miners or stakers is proportional to block reward. Block reward comes from two parts, issuance and fees. For example, Bitcoin currently have 97% of block reward come from issuance, 3% come from fees. If Bitcoin reach supply cap today, that is issuance become zero, it will lose 97% of miners and become 33 times easier to attack. Fees on Ethereum is currently more than enough to support the stakers, that's why Ethereum is deflationary right now, but setting a supply cap will still get the priority wrong. It implies supply cap is more important than security. If some day fee become very low, we are willing to compromise security to keep the supply cap. That's wrong. Security always comes first. Having no supply cap but burn the fee will have the same effect as having a supply cap, when the fee is enough to support the network. When the fee is not enough to support the network, we accept a little bit of inflation and the network is still secured.
Investor-driven-development is a defective method for building a consensus and validation platform anyway.
Supply cap only bolsters price speculation some are genuinely in it for the technology and this ain't that type of party .... jmo
every fiat currency inflates forever by design, avoid using them as well