Ethereum Falls as Hardfork Increases Inflation by 30% – Trustnodes

Ethereum Falls as Hardfork Increases Inflation by 30%


Ethereum network stats, Jan 2020

Ethereum’s price has turned downwards today just hours after a controversial hardfork changed issuance by reducing block-times.

Eth’s price fell by 7% from around $138 at the end of last year to a low of $124 before reaching circa $127.

Ethereum's price, Jan 2020
Ethereum’s price, Jan 2020

The decentralized cryptocurrency has hard forked today to delay for two years the protocol level difficulty bomb which increased block times from around 13 seconds to 17 seconds.

In the process it reduced inflation from circa 13,500 eth per day to about 10,000 eth.

Now however this hard fork is to send block times back to perhaps 12 seconds, with inflation thus to rise by some 3,000 eth a day.

Ethereum's daily inflation rate, Jan 2020
Ethereum’s daily inflation rate, Jan 2020

This situation is expected to continue until next year or perhaps even 2022 when inflation might then drop to near zero.

In the meantime however eth will have a considerably higher rate of new supply than bitcoin once the latter algorithmically slashes it by 50%.

Unlike eth, bitcoin’s monetary policy is set in stone. So come May, the halvening will slash inflation and will keep it at those slashed levels.

While in eth, its monetary policy is set by some collusion of devs, marketers, and miners, who without consultation – or even general discussion – have pushed this decision through to the entire network.


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