Source: Steve Heap, Shutterstock
The ongoing cryptocurrency frenzy has resulted in several corrections in the crypto market. Last week, Ethereum blockchain engineers announced one of the major revisions to the network since its inception in 2015.
The Ether coin developers will cut short its total supply by getting rid of a bunch of existing crypto coins.
As per this initiative, the second largest blockchain-powered network will reduce the amount of outstanding Ether by trashing a few coins every time its transaction gains momentum.
This action has already come into effect after last week’s supply reduction approval.
This is a big shift in the entire crypto ecosystem. This move will likely propel the price of the coin this year as the demand-supply equation changes. The entire network upgradation, on the back of this development, will be over July or August.
Currently, there’s no fixed value of Ether for miners and users because of its unlimited supply. But with this network upgradation, an embedded average price will be available to the clients.
Crypto analysts have been calling this one of the biggest achievements in the crypto market. The infinite supply of the virtual coin led to criticism of it being weak and inflationary. This new move will regulate Ether’s inflation in the crypto space.
Ethereum’s Inevitable Growth
‘Digital silver’ has witnessed an incredible surge of 143.76 per cent this year, beating Bitcoin’s growth that has risen by 89.60 year-to-date. Ethereum has rallied approximately 796 per cent last year.
In contrast, ‘digital gold’ bitcoin has gained nearly 591 per cent in the past one year, as per data compiled by Kalkine Media.
Bitcoin has a current total supply of 18.65 million. Its maximum supply stands at 21 million coins. Whereas, Ethereum has a present total supply of nearly 115 million without any upper limit. Curbing the inflated supply may pay off for the second largest crypto coin.
Image Source: Kalkine Group @2020
Ethereum was trading at US$ 1,831 on Wednesday, March 10, 2021, marginally up by 1 per cent amid the continued crypto frenzy.
The coin touched its all-time high of US$ 2,0336.55 per token on February 19, 2021. Now, analysts are indicating its next high of US$ 3,000 that could come soon in the wake of new changes from the network.
However, the crypto market is quite risky as it does not have any centralized regulator. So, investors must tread with caution.