Vitalik Buterin has penned a new proposal that could lay the foundation for resolving one of the ethereum network’s biggest outstanding questions – whether a limit on the amount of ether that could be created would ever be set.
In a new ethereum improvement proposal (EIP) authored April 1, the cryptocurrency’s creator issued his latest thoughts on the matter, posing to developers and software users that the maximum supply of ether, the network’s cryptocurrency, be set at 120,204,432, “or exactly 2x the amount of ether” sold in its original sale in 2014 in a forthcoming software change.
As such, the comments mark one of the first times Buterin has directly addressed the platform’s monetary policy, a subject whose lack of clarity has drawn critics, including from investors who have publicly doubted its potential as an investment opportunity.
While no more than 21 million bitcoins will ever be created as per the rules of the bitcoin protocol, ether has long had a more open-ended policy. Per the terms of the original issuance, up to 18 million ether are allowed to be issued every year, though it has long been said the terms would change following a milestone change to the protocol’s design.
Elsewhere in Sunday’s post, Buterin sought to position the idea, if embraced, would “ensure the economic sustainability” of the platform following the move to a new algorithm by which ether are created. (As profiled by CoinDesk, ethereum intends to soon ditch the proof-of-work model originated by bitcoin in favor of an alternative proof-of-stake algorithm called Casper.)
Indeed, Buterin views the coming shift as an ideal time to provide clarity on how those who operate the software necessary to verify transactions will be rewarded in the future, even if the exact terms are still clearly in the ideation phase.
According to the post, Buterin foresees situations in which a monetary policy wouldn’t be decided until after 120 million ether have been issued, at which point he has proposed selecting another alternative limit as high as 140 million.
Still, it’s important to note that the proposal is just that – a proposal.
Even with the statements, ethereum developers and users would still need to embrace the change, merging the formal code into the software that the idea would require. As such, while notable, it may just be the start to a process that could take months or years, if pursued.
Image via Pete Rizzo for CoinDesk