- Ethereum (ETH) up 5.4 percent
- In two years, ETH issuance may be reduced 10-fold.
From Constantinople to the activation of EIP 1234, Ethereum fundamentals are overly bullish. Add that to possible plans of reducing ETH issuance by 2021 and bulls are at a prime position to rally. At the moment, ETH is up 5.4 percent.
Ethereum Price Analysis
The Ethereum developer community are a determined lot. The Constantinople update set the ball rolling. Plus, with another update in two months, all indicators point to a bullish ETH. However, in the midst of it all, the main discussion is around the consequences of upgrading and shifting from a proof-of-work system to a proof-of-stake consensus algorithm.
Although building the bare bones for a scalable and efficient network, there are wrinkles that must be ironed out. A visible one is talk around ETH issuance and whether there should be a hard cap.
“Because issuing new coins to proof of work miners is no longer an effective way of promoting an egalitarian coin distribution or any other significant policy goal, I propose that we agree on a hard cap for the total quantity of ETH.”
Stemming from above, a vocal Ethereum developer, Justin Drake says upon Beacon Chain activation the total ETH in circulation may be slashed 10-fold:
“Here’s a possible timeline (dates likely totally wrong!) highlighting the key milestones: January 2020: Beacon chain launch. June 2020: ETH2 light clients production-ready. November 2020: ETH1 fork #1 to have its fork choice rule honor ETH2 finality (conservatively, no issuance reduced). March 2021: ETH1 fork #2 to reduce issuance by 10X.”
Ideally, in case this happens then ETH would be scarcer that BTC and LTC. From supply-demand dynamics, that is massive for ETH holders as a repricing…