Ether inflation will be reduced by 80% with the adoption of Casper

in #crypto6 years ago


The Ethereum (ETH), the decentralized computing platform and the second largest market capitalization of all cryptocurrencies, plans to reduce its inflation rate by 80% in just a few months, through an update Hybrid: "Casper. The rewards of the blocks will be estimated at 0.82 ETH instead of 3 ETH. This decline will reduce the annual inflation rate to 2%.

Ethereum inflation will decrease

After the Hybrid Casper update, Ether will be rare. Updates will allow Parity and Geth, the two major customers of Ethereum, to make the latest improvements. Casper - the Friendly Finality Gadget (FFG)- is also known as Casper's Proof of Stake (PoS) and Work Proof (PoW) merge protocol.

According to Ethereum's Yellow Paper, the transition from PoW to PoS is an integral part of its roadmap. PoW uses a lot of energy and has no economic purpose.

The Ethereum Improvement Proposal (EIP) states:

The PoW Ethereum Transition from PoW to PoS is part of the Roadmap and the Yellow Book since the launch of the protocol. Although successful in reaching a decentralized consensus, the Work Program consumes an incredible amount of energy, has no economic purpose, and has no effective strategy to resist cartels.
Casper's FFG protocol can be superimposed on any block mechanism, which determines which string to rest on. Overlaying the FFG requires some protocol modifications, allowing the network to fully test and evaluate the Casper FFG over PoW.

Increase in price of Ethereum

The transition to the new hybrid update was necessary for a variety of reasons. These include extremely high energy consumption, issues of equity of access to mining equipment, control of mining basins and the evolving market of ASIC miners.

In addition, the value of the ETH will also be affected by the reduction of inflation, at a rate of 2% per year. This will surely lead to an increase in demand for cryptocurrencies and, at the same time, a decrease in supply. In addition, scarcity will increase the price of ETH in the medium and long term.

What do you think of the reduction of Ethereum inflation at 2% per year? Tell us in the comments section below.

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