Limiting ETH's total supply

[Abiky]

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?

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[shinratensei_]

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.

[Yogee]

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.

[ralle14]

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.

[minairia3]

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.

[jessyj48]

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?

[Yudhisthir]

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.

[Doranile432]

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

[pawanjain]

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.

[Byakuga]

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

[r32godzilla]

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.

[Abiky]

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.

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.

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.

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.

[bttmember]

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.

[Teawhalee]

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.

[kooboat]

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.

[timmmers]

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.

[rdluffy]

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

[livingfree]

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.

[pikkie]

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.

[royalfestus]

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