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How many ethereum will there eventually be?

Holden Griffin Answered question April 3, 2023
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Holden Griffin Answered question April 3, 2023
1

I think that you are referring to the total supply of ETH, if you look up ethereum on coinmarketcap you will notice that there isn’t a max supply of ETH specified as what we would have for Bitcoin ( 21 million ). Max supply means the maximum amount of coins that would ever be created. According to the response by StephanTual on ethereum community forum, there won’t be a maximum supply. If this is the case, isn’t ethereum going to be ever inflated as more and more ethereum is produced every single year?

It won’t. A fixed amount of ethereum will be mined forever. The yearly issuance of ethereum is capped at around 18 million ( 25% of the initial supply as agreed by all parties in the presale of ethereum in 2014 ). Over time, the max supply will keep increasing and 18 million of ether produced every year will constitute a smaller and smaller fraction of the total circulating supply and tends to 0% asymptotically ( yet never really reached 0%). On the other hands, factoring in the amount of ethereum lost every year ( due to theft, lost of private key, the death of owner, carelessness etc ), at the some point, theorectically, the rate of creation of ether will reach an equilibrium with the rate of lost of ethereum.

However, according to ethereum.org, Ethereum will be switching to a new consensus algorithm (Casper) than Proof of Work (POW) around 2018-2019 which essentially will be more efficient than its predecessor. The exact issuance method and function is still under active research / to be confirmed. Therefore, there might be a potential change in the economics of ethereum from what is described above. However, according to ethereum.org, the issuance rate under the new algorithm is expected to be lower. Whatever method it is going to be, the organization guarantees that the method/model of choice will benefit the health of the network as a whole and no preferential treatment will be given to any group of individual.

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