Vitalik’s Serious Joke: The Case for Ending Ethereum Inflation

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Nevertheless, the proposed issuance cap has also been the brunt of heavy criticism. And while rewards would decrease as the total ETH supply converges toward its limit - potentially disincentivizing miners - Buterin said that inflation poses a similar risk. While the inflation rate on ethereum is currently quite low, Buterin contended that even small rates of inflation are a "huge deal" in the context of financial market returns. Zamfir, for example, has spoken out against putting a limit on the issuance of ether in the past. "Ether has a primary intrinsic purpose on the ethereum protocol, that is, to be consumed as a resource with which to run calculations upon a computational machine," an independent ethereum developer, Darryl Morris, wrote in a blog post.

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It turns out, Vitalik wasn't exactly joking.

Sure, that might be what most people thought when ethereum's creator published a controversial proposal on April Fool's Day, but the post has prompted a very real, very serious conversation about whether the underlying economics of the world's second-largest cryptocurrency should be altered.

In fact, in the weeks since the concept was first floated, dialogue has only gotten more heated about the idea that a limit could be placed on the total number of ether, ethereum's cryptocurrency, that could ever be created. And while it's long been a contentious topic (there isn't currently a cap), the rate at which new coins are being introduced into the market has been growing.

Buterin...

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