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Ethereum (ETH) Developers Cut Block Rewards By 33% To Curb Inflation

From 3 ETH To 2 ETH Every 14 Seconds

As with the growth of any asset, product or service, development is key. And it seems that the team behind the Ethereum project has taken development to heart, recently holding an hour-long meeting to discuss the future of their brainchild.

Friday’s meeting, dubbed “Ethereum Core Devs Meeting Constantinople Session #1,” covered a variety of topics that include ASIC resistance, an updated consensus algorithm (ProgPoW), future hard forks and a so-called “difficulty bomb,” which are all topics that pertain to October 2018’s planned Constantinople hard fork.

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But the curiosity of many investors, traders, analysts, and miners piqued when the 15 meeting attendees started to discuss the rules surrounding this issuance of Ether, which has become a hot topic within cryptocurrency community.

After discussing Ether issuance for a good period of time, the attendees, which were mainly composed of core developers, decided to confirm a 33% block reward reduction, from 3 ETH to 2 ETH as per Ethereum-Improvement-protocol 1234.

While this announcement may seem mundane on the surface, some were over the moon about this decision. Eric Conner, an Ethereum proponent, highlighted the statistics of the current Ethereum Network and when the Constantinople upgrade occurs.

Conner revealed that as it stands, there is a 7.4% annual inflation rate of Ether, which amounts to a hefty 7,378,402 ETH ($2.065 Billion). This is evidently ludicrous, with many pointing out that a 7.4% inflation rate eclipses the declining purchasing power of ‘popular’ fiat currencies. But once EIP-1234 sees full implementation, the Ethereum network’s inflation rate will drop to a respectable 4.7%, or 4,918,935 ETH a year ($1.37 Billion).

It was added that this move will essentially put Ether’s inflation rate nearly on-par with Bitcoin’s, which will both hover around 4% annually by the start of 2019.

Alex Kruger, an Argentina-based cryptoanalyst, questioned why the market “isn’t reacting more bullishly to this.” But as seen by this week’s news cycle, the market has seemingly stopped reacting to news altogether, with bullish and bearish news alike not making any dents on the often irrational price action of crypto assets.

Eduardo Gomez, a Venezuelan cryptocurrency commentator, likened this move to a Bitcoin block reward halving event, adding that prices will first dump “then moon” in the months following the event.

Gomez is alluding to the theory that a smaller block reward will only bolster prices in the long-run, as miners will need to put in more ‘effort’ (funds, electricity etc.) to garner the crypto they are craving for. And as seen by the previous Bitcoin halving events, this seems to be more of a reality than a theory, as the price of the foremost crypto asset surged in the months/year following the move from 25 BTC to 12.5 BTC per block.

In related news, along with reducing block rewards, the Constantinople EIP-1234 move intends to delay Ethereum’s difficulty bomb, which will give developers more time to work on the Casper protocol, which would move the network from a PoW-centric system to a Proof of Stake (PoS) model.

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Ethereum Summit Attendees Commit to Governance Plan

Several stakeholders in the ethereum community have pledged support for a governance plan produced by attendees of the EIP:0 Summit.

Organizers behind the EIP:0 Summit, the invite-only ethereum community meet-up that has drawn criticism, committed to four new governance steps on Wednesday, according to a statement. Notably, Parity Technologies, Aragon and the  Web3 Foundation, among others, have already pledged their support in signing the statement of intent.

As previously reported by CoinDesk, the two-day summit hosted earlier this month addressed governance issue in the ethereum ecosystem due to the network’s growth. At present, it is difficult to gauge sentiments among the different parties, including developers, investors and miners.

To that end, the plan’s signatories have committed to creating a statement of shared values for ethereum, supporting the creation of “open source tools to collect key signals and metrics,” having a governance call every month and organizing a second, larger EIP:0 meeting.

Key signals include ethereum transaction volume, the number of deployed contracts, the number of GitHub contributions and other factors.

One way to incentivize that technological development could be through grants, the statement said.

Perhaps most notable, however, is the support that a second EIP:0 Summit is receiving.

For instance, Afri Schoedon, a developer and communications officer at Parity, said in a tweet that “[the Summit] must be as inclusive as possible. And if 350k people show up, we have to deal with it.”

The statement similarly noted that a future summit would have to build on the existing model, including by “expanding opportunities for interaction from viewers not in physical attendance (time, location and participants to be determined).”

The full list of signatories to the statement includes L4 Ventures, developer Lane Rettig, Giveth founder Griff Green, Ethereum Foundation member Hudson Jameson and startup Gnosis.

Ethereum image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Vitalik: Ether Cap Is a 'Joke' Worth Taking Seriously

Just trolling – but maybe we should do it anyway.

That’s the gist of a tweetstorm Monday from Vitalik Buterin, in which the ethereum creator said his proposal to create a hard cap on the supply of ether tokens was intended as an April Fool’s “meta-joke.”

While he said he originally just wanted to see people argue over the merits of fixing the supply, Buterin added that he now believes the idea is “worth considering.

Ethereum Improvement Proposal 960, published April 1, suggested that the ether supply be capped at 120,204,432 units, twice the amount originally sold in 2014. Addressing the cryptocurrency’s presently unclear monetary policy, the proposal suggested that a hard cap would “ensure the economic sustainability” of ethereum.

It should not matter whether or not the proposal was written as a joke, Buterin said Monday on Twitter. Because “the words actually were written in the github issue, and the arguments for it are real arguments,” he said the suggestions are “very real.”

He continued, saying:

“If the community wants fixed supply and people believe that EIP 960 is a good way to achieve that, then it should adopt the proposal. If the community does not, then it should not. This is true regardless of whether or not the original intent was in jest.”

Buterin also said some 20 percent of his blog post announcing the EIP was plagiarized from the website of Tron, a digital entertainment blockchain startup.

Yet based on community feedback, Buterin said he “now believes” that developers should look at creating a hard cap. He listed some arguments in favor of the proposal, including that in the long run, “inflationary tokens are a bad idea.”

Buterin concluded by saying that the ethereum community has progressed from waiting for the core developers to make every change to debating ideas regardless of who proposes them, but noted that “there’s still a long way to go.”

Image via CoinDesk archives

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.