Ethereum Developers Agree to Increase Inflation on January 6th – Trustnodes

Ethereum Developers Agree to Increase Inflation on January 6th

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Rough consensus has been reached to delay the difficulty bomb for years between ethereum developers in a public call.

The call itself had some technical problems, so it’s not clear what exactly was said, but Tim Beiko of PegaSys says:

“The current proposal is block 9.2M, which would bring us to ~January 6th.

There are no objections on the call, so it seems we have rough consensus to upgrade on block 9.2M, push back the difficulty bomb 9M blocks, and use the Mountain Glacier name.”

Nine million blocks is the current number. Devs have agreed to delay the difficulty bomb for 4 million blocks.

That’s roughly two years, or 700 days at 15 second blocks. So if this fork goes through the difficulty bomb won’t kick in until the very end of 2021 or in early 2022.

In the meantime the Proof of Stake (PoS) Beacon Chain is meant to go through probably during spring at the earliest. That will increase inflationary new supply depending on how many stake.

In addition, inflation will instantly increase at the very point this fork goes through by around 2,000 eth a day. Up from the current circa ◊11,600 back to the ◊13,600 that miners were receiving before the difficulty bomb kicked in.

Ethereum issuance, Dec 2019
Ethereum issuance, Dec 2019

There has been no public discussion between devs and ethereans on what exactly should be done both in regards to issuance and in regards to the difficulty bomb.

Devs instead decided monetary policy only between themselves, with the initial name proposed for the fork being Melting Glacier.

That presumably sounded too much like the naming of the civil liberties dismantling “Patriotic” Act, so they went with Mountain Glacier which still gives the same message.

That being: they are melting the ice age, another name for the difficulty bomb. Arguably they are also melting the real glaciers as mining takes quite a bit of energy and miners usually operate near cost.

Proof of Stake is meant to remove miners and thus make ethereum fully environmentally friendly, but full Proof of Stake is years and years away according to Vitalik Buterin, ethereum’s co-founder.

There will instead be a hybrid of sorts of PoS and Proof of Work (PoW) mining, with the PoS chain initially sort of having nothing to do with the PoW chain.

There are suggestions eventually the stakers might finalize the PoW chain through decentralized checkpoints, but that’s a pretty complex problem and one that is difficult to solve.

Without the difficulty bomb, there probably won’t be much of an incentive to solve it either. So while all other main cryptos are reducing inflation by 50%, ethereum is apparently to increase it in an “emergency” fork mere days after the New Year party.

Copyrights Trustnodes.com

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Matt
December 2, 2019 5:48 pm

What the hell are these devs doing.. Is their wish to suppress the price further? Well if that’s the case that are doing a good job.. Must be in cahoots with some bear whales..

digicoiner
December 2, 2019 8:55 pm

The issuance isn’t that high. It amounts to just under 5 million eth per year or about 4.5% per year by my calculation. Last year it was about 20,000 eth per day and it was even higher in 2017. With the switch to PoS the issuance rate on PoW is supposed drop dramatically.

VITALIK
December 3, 2019 1:54 am
Reply to  digicoiner

UNFORTUNATELY, A LOT OF ADDITIONAL ETHER WILL BE PRODUCED BY THE PROOF OF STAKE WHEN IT COMES. (IN ADDITION, THERE ARE POSSIBILITIES OF A REDUCTION IN BLOCK TIMES BY HALF SENDING EVEN MORE ETHER INTO THE MARKET). ETHEREUM WILL HAVE AN INFLATION MUCH HIGHER THAN BITCOIN (3.5% VS 6.5%) AND ALREADY PAYS TWICE AS MUCH FOR SECURITY AS BITCOINRELATIVE TO MARKETCAP.

Paolo
December 3, 2019 10:07 am
Reply to  VITALIK

Whatever ETH being paid to stakers in POS chain won’t be available on the POW chain, and won’t be able to be sold, so it’s inconsequential from that point of view.

Robert
December 3, 2019 10:56 am

More than 18 months nothing only Lie and Lie and Lie. Don’t waste your time, Don’t lose your money – Don’t mining Ethereum or Ethereum Classic -also Don’t invest in Crypto Mining and Find another job. This makes no sense anymore

shutup
December 3, 2019 11:07 pm
Reply to  Robert

“Don’t mining” LOL

Pedro
December 2, 2019 4:45 pm

Ethereum is becoming more and more a disappointment every single day.