Ethereum Considering a Cap on How Much Ether Can Be Produced

Although Ethereum is the second-largest cryptocurrency in the world based on its market cap and influence, the currency does not have a limit over how many coins or Ether can be produced. This might change depending on some moves that might come along in the future.

Ethereum founder Vitalik Buterin wrote a proposal about how there could be maximum amount of Ethereum produced within that currency’s life. He also has a specific number for how much Ether may come about. The move comes as the value of Ethereum has taken a massive hit over the last few months with the currency losing more than half of its value during the ongoing downturn in the currency industry.

The Grand Total

In his paper discussing how Ethereum could improve, Buterin stated that he might consider a major software change over how Ether is produced. This would entail a hard cap on how much Ether can be mined.

The overall maximum total he is proposing is worth twice the amount of Ether that had been sold during the original sale for the currency in 2014. Specifically, it would entail 120,204,432 coins.

Buterin also listed an alternative where the maximum total would entail 140 million coins. He does not have any concrete plans for a maximum though and it is uncertain if his idea will ever come to fruition. He plans on telling the public in the future about what the cap might be depending on what can come along over time. The move would also entail a change in the software and coding used to get the currency to move forward.

Current Status

As of the start of April 2018, Ethereum has 98.5 million Ether coins on the market. The original rules for issuing the currency state that up to 18 million coins can be produced and issued each year. This means that the potential for Ethereum to reach its maximum could come about very soon provided that the limit Buterin wants to work with is utilized.

A Possible Investment

The cap on Ethereum could work to try and make the currency more appealing to prospective investors. There have been concerns in the past over how Ethereum does not have a limit to how much can be produced. This makes it so Ethereum might not be prized by as many people due to the potential scarcity of the currency. Such a point is a vital part of why the bitcoin is such a popular investment that has a high value attached to it even as the currency’s value remains in doubt at the moment.

Value Points

Ethereum is currently trading at a little less than $400. The currency’s highest value since the start of the calendar year was listed at around $1,400. However, the currency’s value has dropped dramatically in the last few months as the level of uncertainty around the entire cryptocurrency market has increase. This may be a factor for why Buterin is aiming to try and get a new limit over what people can get off of the currency during its lifetime.