Bitcoin Forum

The Ethereum blockchain is the world's biggest smart contract platform and the second-largest cryptocurrency by market cap. It's impressive to see each "ETH" coin being worth hundreds of dollars when the core devs have designed it to be highly inflationary. Without a defined total/max supply for Ethereum, it may never reach exorbitant prices like Bitcoin.

Now what if ETH's supply would be limited (finite) instead? If devs take this approach, I believe that Ethereum would be much more valuable than what it is right now. It'll become a great store of value just like Bitcoin is today. This could increase demand for ETH by a long shot, as it's widely used as "fuel" (gas) for decentralized applications.

Will such model be suitable for a smart contract platform like Ethereum? I mean if Ethereum Classic has adopted a hard cap of 210m coins, then doing something similar on the ETH blockchain should be a no-brainer. I'm not sure how feasible would to limit ETH's supply. But the community and dev team will decide whenever this will become a reality or not.

What are your thoughts? ???

It will be very suitable for ethereum to use such a model and why not?: we have so many coins that have already created the hardcap supply that will be achieved in the future. Iceage already prepared for this thing but it has already delayed again since ethereum core developer was thinking if ethereum still needs more inflation before its supply will be limited.
That's why ethereum developer has already planned it on the serenity update that will also determine how much the total supply for ethereum coin must be existed in the market. The problem is just when the serenity update will have done.

Limiting the total supply could encourage long-term holding of this coin and that could catapult the price. The argument here is that who would want to use it then? If ethereum reaches thousands of dollars, would investors want to waste it on gas? We will not know the answers yet until that time comes.

Bitcoin was meant to be used as a daily currency but it has become a store of value now. Most investors would rather hold and sell than spend it. The same thing could happen to Ethereum.

Despite not having any max supply didn't they start reducing ETH's block reward ? The max supply is just like a time based switch since the rewards are automatically reduced once the specific block is mined. I think having no max supply is just fine for ethereum since there's always changes and the price is pretty stable regardless of the increasing supply. Putting a max supply might have a difference but I doubt it'll be big because it might take several years for the max supply to have an effect if it would be similar to eth classic.

If this will happened surely it could bring such increase to ethereum price as people believe that lower supply means bigger in demand. This has been the norm of most people when thinking about laws of demand and supply. But I doubt eth devs will do this for now. As ethereum needs a lot of supply since they are providing services to a larger ecosystem of dApps. Eth is fine for me to have finite supply and no valid reason to see why needed to max its current supply now. Important here is the circulation of the total coins that been utilized by the community.

Limiting ETH max supply might happen in the future but for now it's really not helping, I believe ETH should be around 500$ now if not for it's unknown max supply, maybe vitalik wants ETH as infinite supply?

Limiting ETH supply has always been a topic of debate among ETH developers but they have always concluded that limiting the supply now would underestimate the real intention of Ethereum, i.e. to be a utility token. The newer POS would drastically reduce the number of newly produced coins and best of all, the production could be controlled to some extent to match market conditions.

I think it's because ETH introduce smart contract that's why it has infinite supply, sometimes limited supply works but I don't think ETH is designed this way, let's wait for the Proof of Stake feature and see if ETH will have more value

Ethereum is a revolutionary technology and has really great potential. It has created a platform for so many developers to use their skills to innovate something new. This is why ether has been steadily increasing in price and is ranked at number 2.
A limited supply develops trust among the people and is proven to increase the coin's price over the time.
Though the block reward would have been decreased, I think the supply of ether should have been limited.
Limited supply would surely have increased ether's price more exponentially in the long run.

Ethereum is doing fine even if it's supply is unlimited, take a minute to look at some few coins with billion supply, they aren't performing good at all, look at ripple with billion supply still stuck at 0.23$, it shows that Ethereum is no nonsense project

Definetely I agree with you. Almost every altcoin provided its total supply, but Ethereum didn't. Vitalik in the past said that there won't be more than 100 million Ethers, but already there are. So for me Ethereum is now coin with high inflation rate, so in the time the value will go down if new money doesn't come.

I was not aware of that. Thanks for letting me know. If indeed developers are planning to implement a hard cap on ETH's supply, then the world's second-largest cryptocurrency by market cap could reach new ATHs in price on the crypto market. It could become the next "Bitcoin" as Ethereum will also serve as a store of value. Ethereum Classic is way ahead of Ethereum in this regard, with its recently-approved monetary policy. It has a design where block rewards are halved within certain periods of time (called "Epochs") just like Bitcoin. But I wonder how a hard cap in supply will work in a PoS blockchain? I guess we'll have to wait and see what happens right after devs make the decision of limiting ETH's supply sometime in the future. ;)




We'll have to see what happens in the future with a hard cap in ETH's supply. If prices spike towards astronomical levels because of this, I wonder if running/developing smart contracts on the ETH blockchain will be cost-effective? A highly-priced Ethereum (around $10k per coin like Bitcoin) could make the process of interacting with smart contracts a lot more expensive than we've thought. If that's the case, then it's best for ETH to remain with an unlimited supply (inflation) in order to keep prices as low as possible for cost-effectiveness than anything else. In a world where adoption is key for the survival of any project, Ethereum would need to remain as affordable as possible for people to be able to use decentralized applications more thoroughly. But who knows? If it worked for Ethereum Classic, it might work for Ethereum as well. :)

I think they are already working on it and it will be the part of Eth 2.0 but obviously it is not the priority right now may be 3rd or 4th phase of Eth 2.0 when the supply limiting will be applied so i think this will come next year obviously if the initial or phase 1 of Eth 2.0 is implemented smoothly this year.

This will have alot of great impact on ETH. The value will increase in price and usage. It will he wan immediate substitute to Bitcoin for payment and adoption. I trust the dev to do this if they wish base on their long term plan.

Well the developers behind ETH 2.0 should do everything possible to save the good image of the ethereum blockchain network. The recent buzz around ethereum has been very frustrating for most holders. It is the  hope of many blockchain enthusiasts that this new innovation would generate great interest  in ETH once again.

I do not understand why they chosen this economy model. As an inflation currency people would sell more than buy and hodl, same like current fiat money. Fiat money doesn´t have limited supply and constantly new money being printed into the system. And the result? American dollar has lost around 95% of its value over the past few years.

Guys, you have to understand that price is not everything, higher price os ETH can be bad for smart contracts

You can read some info here: https://cryptobriefing.com/low-eth-price-ethereum/

So it's not all about the price for ETH, it's not a crypto used for payments

As an investor of it, I do agree that limiting the supply of it will help it grow more than it is today.

Determining the limitation of it is a good idea because if it's supply won't be determined, it's hard to see it become a store of value. I want it to see someday that Ethereum is also one of the greatest assets which is considered not just for smart contract platforms.

But also as an asset being a store of value.

We'll see if the devs will include this concern during the update.

well from this incident that I know when developers from ethereum do not reduce supply and limit the supply of ethereum, the price is difficult to go up because I know when supply is limited and demand is very high then it can provide price increases at the exchange place.

I appreciate the timing of Ethereum in the creation of the scarcity and I expect consistency in the token management all through the bullrun. They might need to also contain those team members that sold like in the last ATH. The adoption of scarcity creation from new coin looks bizzare to me especially from the early coin creation. Scarcity created through staking, burning and limited supply for investors at crowdasle does not look to me as the same strategy as theirs. I already lost trust in ethereum until now

This had been a subject of controversy among the traders and investors on the hard cap of Ethereum. Unlike BTC which has a total supply of 21 million, Ethereum and Monero doesn't have one. But in the case of Ethereum, Vitalik proposed the EIP (Ethereum Improvement Proposal) in a way to cap the total supply at ~120 million. Since the cryptocurrency runs on the basis of network consensus and the people acceptance of the change, the EIP has never been accepted as of now nor they were tied to the code. But from Monero standpoint, once the supply hits the 18 million mark 0.3 XMR would be mined constantly per block thereby supporting the miners in the process.

There is a defined total/max supply was proposed by Vitalik but the consensus has never been approved till now. This does show that miners aren't really favorable to the idea nor does the public. Vitalik has proposed that if the total supply crosses his approx 120 million mark, the supply can be capped at 144 million again. Either of them were never really approved, so I don't think there would be a finite supply for Ethereum as of now. I am a Bitcoin, Ethereum and Monero maximalist and I have placed my trust on these three coins while the latter would prove to be perfect competitor for Bitcoin on a longer run.

Casper might change the way how we look Ethereum at the current phase and we would get introduced to a newer algorithm called Proof of Stake. Well, at some point of time in 2020 we would be experiencing this new protocol changes which could bring a development to the hard cap controversy.

Yes, also Ethereum experienced a "halving" but it is more secure for investors when they know that Ethereum is rare with limited supply and noone is able to print more Ether tokens into the ecosystem.  ;)

Exactly. Ethereum's current supply greatly resembles Fiat where every once in a while, new coins are "printed" by the issuer. Maybe developers have chosen Ethereum to be this way in order to reduce costs for interacting with smart contracts? I believe that a higher priced Ethereum would greatly limit the user's level of accessibility into decentralized applications. After all, a fee paid in ETH is required to use (or even deploy) a smart contract on the Blockchain. The classic version of Ethereum (ETC) might have successfully adopted a monetary policy, but that doesn't necessarily mean it'll work on Ethereum too.

By all means, the developers and the community will have the final decision on implementing a hard cap on ETH's supply or leave everything as is. As much as I'd love to use Ethereum as a store of value like Bitcoin, a reduction in supply doesn't seem to be feasible right now. What's important is to keep Ethereum as affordable as possible in order to attract people into decentralized applications. Otherwise, the high prices could scare away people in the mainstream world looking to use smart contracts for their own benefit.

Considering that Ethereum is the home of "decentralized finance" (De-Fi), it'd need to focus more on scalability instead of adopting a new monetary policy which would limit the coin's supply. As long as everyone can use Ethereum without hassles, there should be nothing to worry about.



Thanks for sharing. I've figured that it's not suitable for ETH to reduce its supply over time, simply because prices will reach astronomical levels like Bitcoin. After that, it'll become extremely difficult for the average person to use decentralized applications for his/her own benefit. The unlimited supply in the ETH blockchain has been implemented by the developers for a very good reason. It's this "uniqueness" that separates Ethereum from Bitcoin and vice versa. As long as ETH is cheap to use, the world's second-largest cryptocurrency by market cap will be able to fulfil its vision of "banking for the unbanked".

Imagine each ETH being worth $20k just like Bitcoin was back in 2017. De-Fi apps like the Compound Protocol and InstaDapp would experience a decline in adoption because of the high fees in terms of USD. Even though Ethereum Classic has adopted a hard cap in supply, it still hasn't experienced an issue in adoption because prices per coin are much lower than Ethereum. But if ETC rises way above $2k per coin, you'd expect smart contracts to charge large amounts of money in terms of USD each time someone interacts with them. In the end, Ethereum will work best as a coin with an infinite supply and PoS for highly-performing and affordable smart contracts for the whole world to use. Just my thoughts ;D

In my opinion, it may cause more harm than good, if the supply of ethereum is limited. Firstly, the purpose of ethereum is not to serve as a currency for the purchase of goods or services, rather it is to serve as gas for transactions and smart contracts on the platform. Most projects prefer using the ethereum platform because of the popularity and low gas price it offers. If the supply of ethereum is limited, it would lead to an increase in the value and people would prefer to hold than use it as gas. Even the projects may be unable to afford the gas fee for establishment of smart contracts and would have to look else where. Come to think of it, despite the fact that the supply of ethereum is not finite, the value could be said to be relatively stable and as such it could be a store for value for short to medium term.

I don't see this feasible for Ethereum since smart contracts require users to pay some ETH as "fuel" for their execution. It's best to have an unlimited supply to keep prices as low as possible in order to provide greater accessibility to the end user. While Ethereum Classic has adopted a monetary policy to implement a hard cap in supply, it's not as popular as Ethereum is. Which means, that prices have remained relatively low having no effect in smart contract adoption within the platform. Things would've been worse for ETC if it had higher prices than $2k per coin as fees in terms of USD will be ridiculously high. There's a reason why Ethereum developers made the platform with an infinite supply of coins. It's more of a feature instead of a bug.

But who knows? Everything will depend on how developers are willing to make Ethereum affordable enough for the use of decentralized applications on the Blockchain. If they decide to limit ETH's supply, they could adopt some sort of "dynamic fee" model for smart contract execution in order to avoid any negative consequences in its adoption. Remember, "when there's a will, there's a way". This is limited to the developers' own imagination. Whichever way the team decides to go forward, Ethereum will still be most popular smart contract platform in the world. Limited supply or not, it wouldn't make much difference for the Blockchain itself other than the current valuation of the cryptocurrency across the market. Time will tell us what lies ahead for ETH as we get one step closer towards the Casper PoS upgrade. Just my thoughts ;D

I think limiting Eth supply should be a priority it will make it a purely deflationary  coin and also investor confidence will boost as they will be sure that no new coins can be generated and dumped in the market and the most important is this will make the price to grow massively.

It could be hard to limit the supply since it was on the market already for a very long time. May limiting its total market could help to move the price but it is not the case that developers have to see but instead, to look it's another applicability in the crypto market. I know we all wanting to see ETH price taps for another high but because of its market demand is not really at high we, therefore, couldn't expect that it moves that way.

I believe that $1k during the 2017 Bullrun is the only highs that we are able to see in ETH history.

Agree. It looks very unlikely that developers would implement a hard cap in ETH's supply since the Ethereum blockchain has a long time since inception. It might do more harm than good as it'll require a contentious hard fork which I believe not everyone will agree with. With a limited supply, comes a higher price per coin. But considering that ETH was designed to be a platform for decentralized applications, having a higher price greatly defeats its purpose. After all, "gas" fees in ETH will rise like never before. It'll become costly in terms of USD for the end user to interact with a smart contract of his/her choice. For the good of ETH's adoption in the mainstream world, it's best to leave it as is.

Since we already have a limited version of Ethereum (called Ethereum Classic), there's nothing to worry about. Miners who want scarcity of coins on a smart contract platform would choose ETC over ETH. But everyday users will surely use ETH over ETC because of its greater accessibility for smart contracts. Until now, a high price per gas in terms of USD on the ETC blockchain is not an issue. That's because each ETC coin has a low price on the market. Expect to see reduced mainstream adoption of the ETC blockchain once prices start to rise above $2k because of the higher-priced gas fee in terms of Fiat for each interaction with a smart contract.

Nonetheless, it might be the case that ETH will rise no more than $1k per coin. It'll never be able to reach higher prices in the future as long as its supply is undefined. While that's good news for everyday users, it's not for the "hodler" or long-term investor. That's the case with inflationary cryptocurrencies like ETH and EOS. At least, ETH proves to be a solid smart contract platform that focuses on decentralization above anything else. Just my opinion :)