Ethereum is deflationary? - page 2. | Bitcointalksearch.org

malcovi2

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Quote from: ObscurePen on February 02, 2022, 07:00:17 AM

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

yes, its a deflationary currency i think around 1m ether was already burned due when london fork was applied.
To those who dont know, ether EIP-1559 has a burn mechanism

https://www.theblockcrypto.com/post/113650/heres-how-much-eth-has-already-been-burned-due-to-eip-1559

el kaka22

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PoS doesn't mean deflationary neither, whoever made you think that was wrong. It is still creating coins out there, with staking instead of mining and that's about it, rest of the system is still the same. Reality is that the amount of money that is created will probably not change, or even if it changes then it wouldn't really be all that much. Only fear that I have right now is the fact that we may not end up with a good fast blockchain after this happens.

I mean it is not impossible to have a fast one, but when 2.0 comes that may cause it to be even slower. Lets hope that it doesn't happen and we do not wait hours for cheaper transactions just because we didn't want to pay a lot, that would be weird. I am sure that just a system where people who pay a lot get it done quicker and people who pay a little gets combined all together and takes a while but nevertheless gets done anyway, that system would have been better.

ObscurePen

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Quote from: avikz on February 02, 2022, 01:23:53 PM

Quote from: ObscurePen on February 02, 2022, 07:00:17 AM

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

Nope! A change in algorithm cannot make a coin inflationary or deflationary. In crypto coin, inflation is calculated based on its fiat value. Regardless of the price of the coin, the inflation will be similar to its fiat value. If you know any other way to calculate inflation of the cryptocurrencies, do let me know.

So a change to POS has no effect of its inflation or deflation. Also I am not aware of any cryptocurrency that is deflationary in nature. For a cryptocurrency to become deflationary, it will have to decrease the supply gradually.

Oh is that so? But I have heard the term deflationary applied to Bitcoin because of its coin cap of 21 million. I was thinking since a similar thing is happening with Ethereum where there are fewer coins entering the market than before, it might also be deflationary.

avikz

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Quote from: ObscurePen on February 02, 2022, 07:00:17 AM

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

Nope! A change in algorithm cannot make a coin inflationary or deflationary. In crypto coin, inflation is calculated based on its fiat value. Regardless of the price of the coin, the inflation will be similar to its fiat value. If you know any other way to calculate inflation of the cryptocurrencies, do let me know.

So a change to POS has no effect of its inflation or deflation. Also I am not aware of any cryptocurrency that is deflationary in nature. For a cryptocurrency to become deflationary, it will have to decrease the supply gradually.

livingfree

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Quote from: ObscurePen on February 02, 2022, 07:00:17 AM

Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

The London hard fork doesn't have anything to do about PoS. We're not yet going into PoS until the devs have already upgraded it.

But it's true that due to the London Hard Fork, it made Ethereum a more reliable deflationary because there's the part of the transaction fees that are being burned.

If you think about it, every transaction that's being made, there goes the fee and a percentage of it gets burned.

tyz

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A switch to PoS alone does not make a coin deflationary unless the quantity remains fixed. Ethereum can become deflationary if the number of fees burned is higher than the new coins created. In the past, this has been the case on some days, but not yet in the long run. For example, in December 2021, Ethereum inflation was around 1.8%.

ObscurePen

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Is Ethereum now a deflationary currency after its hard fork which changed it to PoS?

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