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Blog

Date:
04th Dec 2020
Author:
CryptoAltum Research Team

ETH inflation Rate will be Lower than Bitcoin’s in Ethereum 2.0


Bitcoin has a fixed supply of 21 million and is deflationary. On the other hand, Ethereum is inflationary because of the development fund. However, with the launch of Eth2, Ethereum’s inflation rate will drop below one percent and even to zero. This rate will be lower than Bitcoin’s according to a Messari Researcher, Ryan Watkins.


Details: 

Bitcoin and Ethereum are two of the world’s largest networks. Though both have a Proof-of-Work consensus algorithm, Bitcoin’s fixed supply makes it a deflationary network as fewer coins are released in each epoch. However, analysts are confident that in Phase 1.5 of Eth2, Ethereum’s inflation rate will fall below that of Bitcoin and possibly to negative territory. At this pace, the network may compete with Bitcoin as a store of value but with better features besides being a platform for sending and receiving funds. Bitcoin is now the king and has benefited immensely from capital flight as central banks hit the money printers.


Impact on the ETH Price: 

Bullish. If ETH becomes a deflationary network, it may quickly serve as a store of value asset and a smart contracting platform while being the most active. All-rounded features that may see the coin rally, perhaps printing new all-time highs.


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