Ethereum, which has been likened to the ‘oil’ to Bitcoin’s ‘gold,’ has a shroud of mystery to it – more so than the usual cryptic nature of digital currency – regarding the unknown theory of a limit to how many Ether will be available.
Vitalik Buterin, one of Ethereum’s co-founders, has proposed the potential groundwork for an answer to one of the major questions asked about the company.
In what might have been a grand prank, Buterin published his thought on April 1st in a new Ethereum improvement proposal. It was no joke, however, and it was said that in the cryptocurrency’s upcoming software update the network might be locked in at 120,204,432 which is “exactly two times the amount of Ether” which the original sale saw in 2014.
In comparison to Bitcoin’s 21 million BTC cap, the only threshold in the protocol of Ethereum has been set at an 18 million ETH limit to be issued every year. If the hard cap is set, as propositioned, this would not be the only modification Ethereum would see. Buterin suggested that if this change is accepted, it “would ensure the economic sustainability” and it would be subsequent to a shift from the current algorithm (the proof-of-work model) to a new one (proof-of-stake, called Casper).
In his post, Buterin predicts that there might be a possibility that “for some reason this EIP is adopted at a point where it [would be] too late to set a max cap at 120 million, it is also possible to set a higher max cap.”
Previously, the enigmatic nature of this matter has drawn a fair share of criticism and skeptical investors have not been shy to voice their judgment on the opportunity of investing in the company because of it. This is one of the first times Buterin has explicitly tackled this particular policy and it will be interesting to see whether this will sway any of the skeptics one way or the other.
Those sitting on the fence still have reason not to change position just yet, since it is still only a proposal we have yet to see hard evidence as to whether the change will actually be accepted. Even if it is embraced by the team and users, developing the code to make the transition smooth could be a particularly lengthy process.