Ethereum is deflationary?

[ObscurePen]

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

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[tyz]

A switch to PoS alone does not make a coin deflationary unless the quantity remains fixed. Ethereum can become deflationary if the number of fees burned is higher than the new coins created. In the past, this has been the case on some days, but not yet in the long run. For example, in December 2021, Ethereum inflation was around 1.8%.

[livingfree]

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

The London hard fork doesn't have anything to do about PoS. We're not yet going into PoS until the devs have already upgraded it.

But it's true that due to the London Hard Fork, it made Ethereum a more reliable deflationary because there's the part of the transaction fees that are being burned.

If you think about it, every transaction that's being made, there goes the fee and a percentage of it gets burned.

[avikz]

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

Nope! A change in algorithm cannot make a coin inflationary or deflationary. In crypto coin, inflation is calculated based on its fiat value. Regardless of the price of the coin, the inflation will be similar to its fiat value. If you know any other way to calculate inflation of the cryptocurrencies, do let me know.

So a change to POS has no effect of its inflation or deflation. Also I am not aware of any cryptocurrency that is deflationary in nature. For a cryptocurrency to become deflationary, it will have to decrease the supply gradually.

[ObscurePen]

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

Nope! A change in algorithm cannot make a coin inflationary or deflationary. In crypto coin, inflation is calculated based on its fiat value. Regardless of the price of the coin, the inflation will be similar to its fiat value. If you know any other way to calculate inflation of the cryptocurrencies, do let me know.

So a change to POS has no effect of its inflation or deflation. Also I am not aware of any cryptocurrency that is deflationary in nature. For a cryptocurrency to become deflationary, it will have to decrease the supply gradually.

Oh is that so? But I have heard the term deflationary applied to Bitcoin because of its coin cap of 21 million. I was thinking since a similar thing is happening with Ethereum where there are fewer coins entering the market than before, it might also be deflationary.

[el kaka22]

PoS doesn't mean deflationary neither, whoever made you think that was wrong. It is still creating coins out there, with staking instead of mining and that's about it, rest of the system is still the same. Reality is that the amount of money that is created will probably not change, or even if it changes then it wouldn't really be all that much. Only fear that I have right now is the fact that we may not end up with a good fast blockchain after this happens.

I mean it is not impossible to have a fast one, but when 2.0 comes that may cause it to be even slower. Lets hope that it doesn't happen and we do not wait hours for cheaper transactions just because we didn't want to pay a lot, that would be weird. I am sure that just a system where people who pay a lot get it done quicker and people who pay a little gets combined all together and takes a while but nevertheless gets done anyway, that system would have been better.

[malcovi2]

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

yes, its a deflationary currency i think around 1m ether was already burned due when london fork was applied.
To those who dont know, ether EIP-1559 has a burn mechanism

https://www.theblockcrypto.com/post/113650/heres-how-much-eth-has-already-been-burned-due-to-eip-1559

[letyouearn]

No, it's not. And it won't be I think. It's inflation will be quite low though, and this will help ETH price to grow in the long run - that's for sure. Bitcoin is a bit deflationary - because of the lost coins.

[Dave1]

A switch to PoS alone does not make a coin deflationary unless the quantity remains fixed. Ethereum can become deflationary if the number of fees burned is higher than the new coins created. In the past, this has been the case on some days, but not yet in the long run. For example, in December 2021, Ethereum inflation was around 1.8%.

And just to add to that, we even don't know what is already real numbers are far is circulation is concern.

So no, i don't think that Ethereum will be deflationary, unless they really made some changes which I doubt that devs are prioritizing right now.

[poldanmig]

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

yes, its a deflationary currency i think around 1m ether was already burned due when london fork was applied.
To those who dont know, ether EIP-1559 has a burn mechanism

https://www.theblockcrypto.com/post/113650/heres-how-much-eth-has-already-been-burned-due-to-eip-1559

Ethereum is one of the chains that has been quite active in making many changes to its network, including an update to ethereum 2.0 in which there is an ongoing burning mechanism, and this has the potential to make ethereum a better inflation protector than bitcoin, with increased EIP -1559currently ethereum is reportedly burning at almost 10 ETH /minute.

https://watchtheburn.com/

[masterrex]

IMO, I think that was only put in the wrong context, But based on the detailed explanation above from some of the knowledgeable forum users I agree that the PoS itself is nothing to do with the inflation and deflation mechanism of the Ethereum token supply because it only happens for the purpose and functions of the EIP-1559 implementation by burning the Ether which is collected from the hefty transaction fees of the Network and I think there's some thread about the "unsure" number of Ethereum token total supply so I guess it doesn't make sense to proclaim that Ethereum is now a deflationary coin when we are not sure about its total token supply. correct me if im wrong? 

[hugeblack]

The difference between the proof of work and POS is how to produce more coins. Instead of requiring mining energy, it will be less energy consuming and faster. Therefore, instead of people buying expensive equipment, there will be competition for currencies and a decentralization of distribution.

The contraction in supply and demand may affect the price, but in the short term, the success of ether in converting to POS currency, which is low in fees and good for daily transactions, means an increase in demand and thus the price.

For more you can watch ---> Bitcoin Q&A: Proof-of-Work (PoW), Proof-of-Stake aantonop YouTube OR read ---> Proof of stake (PoS) (Ethereum) - aantonop

[lvsca]

I don't understand why ethereum will soon turn the mining method into POS, because so far POW is very good and proven to be able to survive with the mining community which is also a whale. I saw $Dash one of the coins mined with a very quiet POS. It's possible that Ethereum will have the same fate.

[imamusma]

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

This is still very vague to think about because since Ethereum has had a Hardfork I don't have time to think so for now other than hoping for something new that can be really good for itself, so I can't really answer this right now.

[7deadlyBTCIN]

Proof of stake algorithm is different from deflationary utility, you can only earn more ETH by staking some ETH and I don't see any deflation working in between staking, deflation use case is when max supply of a token decreases when transactions are been made with the token.

[asyakashi]

Ethereum's change to POS will not create deflation if ethereum continues to grow and always shows its quality. POW seems too wasteful of energy to make ethereum want to change the method of mining, I don't know for sure there will be deflation or not, but as long as it hasn't happened everything is fine.

[Fundamentals Of]

I think Ethereum is not a deflationary currency. Not now after the London hard fork was activated, not before when the EIP-1559's burning mechanism was not yet in effect.

So even if the EIP-1559's burning mechanism is taken into consideration, the supply of Ethereum is still increasing overall. Remember that the block time of Ethereum is only around 15 seconds. And every block, there is an additional of 5 ETH to the supply. The number of burned coins is lesser than the number of new coins injected to the supply. 

Lastly Ethereum's hard fork didn't and is not the mechanism to change it to PoS.

[tyz]

Nope! A change in algorithm cannot make a coin inflationary or deflationary. In crypto coin, inflation is calculated based on its fiat value.

It's not quite correct. I think he asked if Ethereum will become deflationary in terms of the amount of available Ether and not in terms of the fiat value. Thus, the project can indeed become deflationary if the amount of newly created Ether is less than the burned Ether. In terms of fiat value, of course, it's then a different story.

[X-ray]

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

It's not yet become a deflationary token. As you can see that through this tweet account https://twitter.com/ethburnbot the total ethereum issued by the miners being surpluss compared with how much being burned by the network or ethereum burn mechanism. that means if it's not yet become deflationary token and remember that ethereum is not become POS token. As far as i know that there was no ethereum 2.0
Ethereum update will be only focusing with the scalability solution. I thought that you have heard about this before. It's from the news that already published by some popular crypto news sites.

[lixer]

No, it's not. And it won't be I think. It's inflation will be quite low though, and this will help ETH price to grow in the long run - that's for sure. Bitcoin is a bit deflationary - because of the lost coins.

Nah, that’s not true, Ethereum is also deflationary. If you have been following up you would know that ETH has been burning a lot of coins. The last time that I checked they have burned about 1.5 million Ether according to my source, which was more than the number of ETH was created that week. This started since the EIP-1559 introduced a new burning mechanism in the ETH platform. But normally like you have said, the inflation would be low even if it wasn’t deflationary, because they set a more predictable transaction fees in an effort to lower the rate of congestion on the network.