Vitalik Buterin proposes reward reduction
Recently Vitalik Buterin, creator of Ethereum, proposed reduction of ethereum block rewards from 5 ETH, which is currently to 3 ETH. This is going to impact reduction of uncle and nephew rewards. Block rewards are rewards that are offered to miners every block. Because rewards are creation of new ethereum, that also means reduction of inflation.
Reduction of rewards is going to mean reduction of inflation, this is also will be positive for the price. It looks like reduction of block rewards are going to come with introduction of new ethereum version called Metropolis. The code is "block.number >= metropolis_fork_blknum". Metropolis is expected to come out in August or September. Ethereum development team is working round the clock to bring Metropolis.
Second proposal was delaying of ice age by 42 million seconds (around 1.4 years), probably to leave enough time until Casper comes out. Delay of time age is going to be achieved by increasing of mining difficulty.
If everything goes after proposed, even with ice age delay, by the end of 2018 block time will be around 30 second. That will mean that every 30 seconds new block will be created (currently block time is 15 seconds) so inflation slowly will be reduced to another 50%.
This new development are positive on Ethereum price, thats why I am bullish on Ethereum on the long term. If evertyghing goes as planned, this creates the possibility that ethereum market cap even exceed bitcoin market cap.
Lets wait and see.
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Great article. When they reduce mining rewards ot will be too late. Price is going to shoot up.