Ethereum co-founder Vitalik Buterin Proposes a Hard Cap on ETH Supply

Last week on March 30th, Vitalik Buterin co-founder of the Ethereum blockchain platform has published an Ethereum Improvement Proposal (EIP) on Github where he has put forward the idea of introducing a hard cap on the total supply of ETH coins at 120 million which is “exactly [twice] the amount of ETH sold in the original sale.”

The main reason for Vitalik Buterin taking this stand goes back to an EIP that was published a few days back by developer Piper Merriam where he suggested the ETH community to consider a hard fork which would “Modify block mining to be ASIC resistant.”

Developers proposed for the anti-ASIC stand after rumours emerged that China-based ASIC manufacturer Bitmain is, in a way, trying to centralize the Ethereal mining process and is all set to ship its first Ethash compatible ASIC miners.

Mr. Merriam stated that “According to ‘the internet[,] there is an ASIC[-]based Ethereum miner on the horizon.”

Following this, a proposal of a hard fork was being made to which Vitalik Buterin said that the decision has been made “in light of the fact that issuing new coins to proof of work miners is no longer an effective way of promoting an egalitarian coin distribution or any other significant policy goal.”

Buterin also stated that the hard fork on the supply will “ensure the economic sustainability of the platform under the widest possible variety of circumstances.”

For implementing this proposal, Vitalik notes that “During the next hard fork that alters reward distributions (likely phase 1 Casper), this proposal requires redenominating all in-protocol rewards.”

He further added that “If for some reason this EIP is adopted at a point where it is too late to set a max cap at 120 million, it is also possible to set a higher max cap. I would recommend 144,052,828 ETH, or exactly 2x the total amount released in the genesis block including both the sale and premine.”

The developer team at Ethereal has been actively working on various solutions in order to improve the scalability and security of its network, and in this matter, it recently has a successful test of its Casper software update.