In an interesting and somewhat surprising move, Ethereum co-founder Vitalik Buterin proposed that Ethereum should have a hard cap on its total supply of Ether (ETH).
The ethereum hard cap proposal news was surprising because, unlike its counterparts such as Bitcoin, Ethereum is known for having an unlimited supply of coins as originally structured by Buterin himself. As per the current structure, an unlimited number of ETH can be mined, circulated, and traded afterward.
The reason why this was so is that Ether acts as fuel for the Ethereum network, being used as a gas for transactions and development actions that are taken on the network. This hard cap would be interesting because it would mean that they are acting similar to Ethereum Classic who has its own hard cap, opting to be seen as a store of value coin.
Buterin made the new suggestion in the form of Ethereum Improvement Proposal (EIP) 960. According to the famous developer, Ethereum’s total supply should be set to 120,204,432 (over 120 million), which in his words is “exactly 2x the amount of ETH sold in the original ether sale.”
He mentioned that the suggestion was being put forth due to how the Ethereum platform has evolved from its initial stages and now needs steps to be taken for its “economic stability”.
As per Buterin, the proposal was also influenced by how the issuance of new coins to proof-of-work (PoW) miners deems to be ineffective when it comes to establishing the platform’s goal of maintaining an egalitarian coin distribution.
Buterin further mentioned that, if approved, then the EIP could be integrated into the implementation of its future Casper update, from where it would start modifying the platform for this change.
The current circulating supply of ETH is 98,571,374 (over 98 million) at press time.
Whereas, the current circulating supply for Bitcoin, the most famous cryptocurrency in the world, is 16,953,762 (over 16 million) BTC, with a max supply of 21 million BTC.
It is prudent to mention that while the proposal was put forward on April 1, some have thought that it was not intended as an April fool’s joke by the looks of it, as it is currently being discussed within the members of the Ethereum community to see if it can be adopted for implementation.
Vitalik Confirms it was an April Fools Joke
The ethereum hard cap proposal was definitely an interesting thought experiment but nonetheless, it was a fluke. It was indeed an April Fools joke!
Vitalik confirmed on Twitter that the ethereum hard cap proposal was a joke, stating:
“For those still wondering whether or not https://github.com/ethereum/EIPs/issues/960 … was an April Fool’s joke, the answer is: it was an April Fool’s meta-joke. *The point* was seeing people argue about whether or not the proposal is “real”.
I wonder how many people made investment decisions based on the ethereum hard cap proposal announcement!