- Vitalik Buterin claims that under Ethereum 2.0, there will be a maximum issuance of 2 million ETH per year
- Charlie Shrem says a massive bull run is on the cards thanks to Bitcoin halving, but we might have to wait until next year
Sunday crypto markets have not seen much to note, but Bitcoin looks like it is finding its feet after a tiring week of double-digit growth rallies.
But Bitcoin isn’t the only one looking to get bullish, as Ethereum co-founder Vitalik Buterin has now claimed that the new iteration of Ethereum, dubbed Ethereum 2.0, will result in a drastically reduced issuance of new Ether.
Speaking on the POV Crypto interview named ‘Internet Money’, Buterin first touched on the topic of why Proof of Stake was the new chosen consensus algorithm for the Ethereum network, moving away from the current Proof of Work algorithm. He said one of the first effects would be a much reduced new issuance of 2 million ETH max in a year:
“One of the reasons why we’re doing Proof of Stake is because we want to greatly reduce the issuance. So in the specs for ETH 2.0 I think we have put out a calculation that the theoretical maximum issuance would be something like 2 million a year if literally everyone participates.”
He did reveal, however, that the current testnet participation recorded about 100,000 ETH issued annually, and this was a testnet that not everyone participated in. Even at max capacity, though, ETH 2.0 would be more thana 50% reduction from the current annual issuance of about 4.7 million. Since not everyone will be expected to participate, it is expected new issuance once ETH 2.0 is active, will be lower than 2 million.
In addition, the co-founder also said that total circulating supply could even experience a net reduction during high transaction volumes since a portion of each fee will be destroyed. According to the protocol, a base fee parameter will apply to divide transaction fees into a miner payment and another portion that simply gets burnt.
One more crucial difference that will improve scalability is how block sizes will be adjusted, rather than fees, when network activity changes. He explains: “Instead of having volatility in transaction fees, we have volatility in block size.”
This week, the testnet has grown to 24,000 active validators and over 20,000 validators in four days.
Bitcoin can certainly afford to wait, and after halving, a bull run will be expected by most analysts, as has been the trend for the past two halving events, especially given the fact that other macro factors appear to be lining up to support this theory.
One of the oldest names in the crypto space, Charlie Shrem, certainly agrees, although he does think that we might have to wait until next year to see this bull run.
Speaking at the Virtual Blockchain Week, the known Bitcoin bull insisted that a steadily diminishing supply of Bitcoin, combined with intense quantitative easing measures from central banks, can only act to drive Bitcoin price up over the coming one to two years. He said:
“It’s kind of crazy that we have a halving during coronavirus because it was such a black swan event. We have two trillion dollars of money printed in the United States, people are starting to get all that money. Also, all these people are getting their unemployment benefits probably when they’re about to go back to work […] and they haven’t been needing to spend much money while they’re sitting at home for the past few months.”
He points to miners as one key pressure point for price going upwards, saying that although they were mainly in it to help secure the network and make a strong future for Bitcoin, at the end of the day they had costs to pay for. Once new supply would be cut in half, they would need to sell Bitcoin for higher prices to cover costs and profitability.
Shrem dismissed stock markets as “very manipulatable” and claims not to own any for that reason, pointing out that it does not make sense to have stock markets at all-time highs when joblessness in the US was a huge problem. That said, he also believed that a Bitcoin bull run was certain, but it wasn’t necessarily guaranteed to be soon. He explained:
“I was looking at data, and it looks like around last halving it wasn’t that the price doubled instantly, but the last halving was actually the start of the epic bull run in 2017 — which was a year and a half later. But the halving was definitely [when the] ‘clock’ started with the miners.”
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The post Trending Bitcoin News and Market Sentiment May 3rd, 2020: ETH 2.0 Will Issue Max 2 Million ETH Annually, Halving to Spark Bitcoin Massive Bull Run in 2021 appeared first on BitcoinNews.com.
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