For me, a coin/token with an unlimited total supply is a disadvantage. Not only do we have to fight volatility, we also have to fight inflation, and those are two very negative points in cryptocurrencies. I can understand that there are very high supplies, with billions of tokens, they can always be burned, also those with an unlimited supply can be burned, but from the beginning, I don't like the feeling they give. Also, now Ethereum has to fight its high transaction fees, if we put it all together it seems crazy to me.I think when Vitalik Buterin created ETH, he thought of the big problem, that it would be terrible if the number of coin/token was not enough for the ownership and use of everyone in the community. At that time, the token price will increase very high, holders will continue to hold their coin/token and the liquidity of tokenomics will be broken. That will kill the coin/token.
For me, a coin/token with an unlimited total supply is a disadvantage. Not only do we have to fight volatility, we also have to fight inflation, and those are two very negative points in cryptocurrencies. I can understand that there are very high supplies, with billions of tokens, they can always be burned, also those with an unlimited supply can be burned, but from the beginning, I don't like the feeling they give. Also, now Ethereum has to fight its high transaction fees, if we put it all together it seems crazy to me.I think when Vitalik Buterin created ETH, he thought of the big problem, that it would be terrible if the number of coin/token was not enough for the ownership and use of everyone in the community. At that time, the token price will increase very high, holders will continue to hold their coin/token and the liquidity of tokenomics will be broken. That will kill the coin/token.
The problem of infinite supply: infinite supply in an infinite time, but at a given time, good control of the new supply & the rate of burning tokens will help token price to be supported.
Transaction cost issue: Layer-2 solutions are being implemented, I believe it will increase the speed of Ethereum to 100x, i.e. 1500 tps.
~ then ETH is hailed and is the largest altcoin in the entire market. Why?Smart contracts and high fees interacting with them. People are forced to buy more ETH to use any Ethereum based products successfully.
Advantages of unlimited total supply:Perhaps you mean suitable? I don't know how being not suitable for payment is an advantage. That would also compliment the not being pushed too high.
+Limiting the token price being pushed too high, which make ETH be not suitable to be used in payment;
The problems of high transaction fees are created by the high demand for Ethereum. Could those problems be solved if Ethereum had a limited total supply?. I've been asking myself that question for several days, but I can't find an answer. What I am clear about is that Ethereum should have a limited total supply, I don't see any sense or need.You are connecting the demand to buy ETH as an investment asset (HODL) because of limited supply with the demand in using ETH as gas fees (SPEND) to interact with smart contracts. Those two are different.
It would have been a disadvantage to eth but I think that's already too late now, with an infinity supply eth still managed to go this high which bring me back to the question "is eth overpriced? Many coins with less supply are not finding it easy to move in price much as very limited supply coins, but surprisingly eth with its humongous supply is very high in price, how about that?Like I said above, it's the smart contracts and high fees that pushed ETH's price.
We know that in the crypto world, not every coin or token has a limited total supply.Thank you very much brother for sharing an informative post with us. You have discussed a very important topic. Currently Ethereum's Advantage and Thank you so much for sharing your nice and informative post with everyone.
DOGE & ETH are 2 of them. If the value of DOGE is said to be low-capped by unlimited total supply, then ETH is hailed and is the largest altcoin in the entire market. Why?(https://i.imgur.com/H4eU4e0.jpg)
Advantages of unlimited total supply:
+Limiting the token price being pushed too high, which make ETH be not suitable to be used in payment;
+The essence is very similar to fiat, maintaining the network's rewards & ensuring the safety of Ethereum blockchain.
Disadvantages of unlimited total supply: reduced scarcity, high inflation rate, limited token appreciation. This is the reason many people dislike Ethereum.
However, with EIP-2878 & especially EIP-1559 coming in July this year after London hardfork, a portion of the ETH fee will be burned, about 1 million ETH per year, will contribute to reducing supply. At the same time a large amount of ETH is in the staking pool also reduces the available supply on the market, increasing the scarcity. So the price of ETH will be guaranteed. But these EIPs are also experiencing resistance from miners as their income is affected. The Ethereum blockchain also faces a hard fork if people are unable to reach consensus.
Having unlimited total supply also helps ETH prevent in the future people will just accumulate ETH instead of using it, thus ETH's tokenomics won't collapse.
What do you think about this? Do you like the unlimited total supply of ETH? And how do you think it will affect to ETH price in the future?
As far as I know, after the last phase of the Ethereum 2.0 update, when switching to the pos consensus algorithm, a significant part of the transaction fees on the Ethereum network will be ignited. thus, Ethereum will have the status of a deflationary asset, despite its unlimited supply. I have repeatedly come across information that the shrinkage of Ethereum will be much more than miners will mine.As expected, EIP-1559 will cause about 1M ETH to be burned per year, less than the amount of new ETH mined from block reward. So it can be assumed that deflation will not take place. However, the supply of ETH will increase slowly, while the increased demand for ETH thanks to the advantages of ETH.20 will give the price of ETH an incentive to increase.
Having unlimited total supply helps ETH prevent in the future people will just accumulate ETH(unlike BTC) instead of using it, thus ETH's tokenomics won't collapse.
Looks like, everyone's looking at the unlimited supply, but ignoring the main key point of burn machanism which will implemented into the transection system after completing the London hardfork in July of this year. After that, more eth will be burned which is great for it. Lets just wait for the finalization of London hardfork. 8)
For me, a coin/token with an unlimited total supply is a disadvantage. Not only do we have to fight volatility, we also have to fight inflation, and those are two very negative points in cryptocurrencies. I can understand that there are very high supplies, with billions of tokens, they can always be burned, also those with an unlimited supply can be burned, but from the beginning, I don't like the feeling they give. Also, now Ethereum has to fight its high transaction fees, if we put it all together it seems crazy to me.