A very important aspect of any cryptocurrency price is determined by its supply. The higher the growth rate of the money supply, the more inflationary pressure there is on the currency. The supply of cryptocurrencies is always predefined and publicly known to all market participants at all times.
Most cryptocurrency users and investors often wonder if there is a limit to the supply of Ethereum. Unlike Bitcoin’s model, The Ethereum platform has an unlimited supply, but an annual maximum supply of 18 million ETH.
What is Ethereum?
Ethereum is a technology that uses the Ether (ETH) cryptocurrency. It is open to all types of audiences all over the world, requiring only a device connected to the internet.
Ethereum is the second largest cryptocurrency in the world, after Bitcoin (BTC), and it was first defined in 2013 by Vitalik Buterin, a Russian who immigrated to Canada. Funding for this project called Ethereum came from an online public sale in 2014.
However, the Ethereum blockchain was officially launched in the media on July 30, 2015. Nowadays, the blockchain is becoming increasingly popular to every company that researches, invests and is interested in the cryptocurrency market.
Ethereum is considered a decentralized blockchain network invented to execute smart contracts completely automatically. In order to make smart contracts, you must first make the payment to the miners using ETH cryptocurrencies.
How many Ethereum coins (ETH) are in circulation?
When Ethereum was launched, it offered 72,000,000 ETH. More than 50,000,000 of them were distributed in a public token sale, known as the Initial Coin Offer (ICO), where people could purchase ETH in exchange for BTC (Bitcoin) or fiat money (such as USD).
In September 2021, there were approximately 117.5 million ETH in circulation. 72 million of them were issued from the initial supply in the genesis block, the very first block on the Ethereum blockchain. The other 40 million ETH are being extracted from open network transactions and activities.
Ethereum derives its value from its utility rather than its limited offer, as in the case of Bitcoin. The Ethereum ability to act as a platform for various decentralized projects and applications increases its exponential value.
ETH reached a record high of 2,040 dollars on February 20, 2021, the main catalyst being the growth of the DeFi sector. The value of Ethereum continues in 2022 in an upward trend, exceeding the historical maximum.
ETH has an ever-changing supply, depending on the requirements on the cryptocurrency market. One important aspect: the fewer coins are in circulation, the more expensive the ETH price tends to become on the crypto market.
The benefits of Ethereum
There are many advantages of using the Ethereum blockchain. The main benefits worth mentioning are:
- Valuable cryptocurrency – The Ethereum blockchain has its own currency, Ether (ETH), which functions as a currency, an exchange method, as well as a way to store values;
- Multi-purpose platform that offers total flexibility to the smart contract creator;
- Completely decentralized, so it doesn’t need a central entity;
- A reliable platform with five years of experience in the cryptocurrency market;
- You can program the Ethereum network according to your needs. You can create decentralized applications such as financial services, games, and other models.
Ethereum’s supply model
Ethereum’s supply model is very different from Bitcoin’s supply model. It has been established that Bitcoin’s maximum supply would be limited to 21 million BTC in total, whereas the Ethereum platform has an unlimited supply, but an annual maximum supply of 18 million ETH.
Both Bitcoin and Ether have a decreasing growth rate of supply. The distribution of Bitcoin is halved every 210,000 blocks, which is almost every 4 years. Ethereum has an annual supply cap of coins, which means that its growth rate is slightly decreasing.
Cryptocurrencies have the ability to regulate the total money supply by controlling both the amount of money in circulation and the growth rate. They can do this through a software algorithm, without a central authority, central bank or government.
Ethereum has an inflationary supply style, while Bitcoin has a deflationary supply style. The main reason is that Bitcoin has a limited number of coins that can be mined, whereas the Ethereum platform produces and spends a lot of new Ether every day. By increasing the amount of ETC, the coin gradually loses its value. While Bitcoin stimulates saving especially for its first users, Ethereum promotes spending and lowers the entry costs for newcomers.
What are Ethereum’s main objectives?
The main goal for creating Ether was to become a rewarding asset for the developers who used the Ethereum platform for their projects. With this objective in mind, another major goal of the network is to become a global platform for decentralized applications, enabling more users around the world to write and run persistent software that is resistant to censorship, downtime and fraud.
Even though Ethereum is based on a blockchain, which is a secure cryptocurrency technology and fraud-free, it is still a programmable platform that allows users to create new applications that go beyond financial transactions.
On the Ethereum platform you can make different types of transactions, the most common being:
- Decentralized finance
- Registration of property titles
- Initial coin offers
- Crowdfunding campaigns
- Tax collection
How to buy Ethereum
Ether quotation is determined exclusively by demand and supply at each trading location. They trade simultaneously in different countries and currencies, so there may be several differences between each existing market.
Due to its fully decentralized feature, it is possible to make transfers between several users. This process is done safely, quickly and at a relatively low cost, with direct negotiation. However, you must remember that there are some risks associated with this style of financial transaction.
In order to buy ETH you must:
- Open a brokerage account
- Make a bank transfer to the brokerage firm where you opened your account
- Access the system of the chosen broker
- Choose the cryptocurrency you want to trade in, in which case you need to choose ETH
- Examine your order book of buy and sell
- Place an order at Ethereum Purchases and complete the transaction
Where do I store my Ether cryptocurrency?
Ethereum wallets are virtual wallets capable of storing cryptocurrencies (ETH). They authorize multiple transactions from their respective addresses.
Currently, there are several different types of crypto wallets:
- Online wallet: a type of wallet that stores data in the cloud
- Mobile (applications) for mobile phones
- Desktop computer software
- Hardware (offline) usually on USB devices
- Paper: usually printed on metal plates
These wallets can be classified as hot when connected to the internet (online) and cold (cold), disconnected from the network (offline). Cold wallets are safer than hot wallets.
Some of the best cold wallets are Ledger Nano X and Treasure One. Ledger Nano X is a crypto wallet with a relatively higher investment cost, but it is a complete wallet with non-open source software. Trezor One, on the other hand, is a cheaper open source wallet, but it does not support all types of cryptocurrency.
The most popular wallet of today’s Ethereum blockchain is My Ether Wallet. It is open source and can work on both computer and mobile devices. In addition to allowing you to store ETH cryptocurrency, it also allows you to print the codes on paper.
Final thoughts on Ethereum
Nowadays anyone can make money in the cryptocurrency market, but you must always be up to date and have access to a mobile device or computer with a high speed internet connection, in order to keep up with the changes that have taken place.
The cryptocurrency market is not a safely guaranteed investment, but if you study the market on a daily basis, you can make an intelligent choice and gain some well deserved profit. After all, cryptocurrencies like Ethereum are a natural trend for investors and many people make money by investing in cryptocurrency technology.
It is becoming increasingly clear that Ethereum is fulfilling a massive need for a new open source internet that is free of censorship and manipulation.
ETH benefits from a feature-packed platform designed to enable decentralized financing as an integral part of this new internet, along with the ability to run applications and host completely new projects.
Some crypto experts believe that Ethereum is evolving into a world computer. In other words, it’s a blockchain based programming language that enables smart contracts and distributed applications with the help of its token Ether. The Ethereum platform can be considered the updated version of Bitcoin, this is why it is often described as Bitcoin 2.0. With the current blockchain platform, Ethereum is closing the gap where Bitcoin has failed or is unable to fix. The main goal is to decentralize all aspects of the digital world.
Currently, Ethereum is undergoing a review of how it operates. The network will gradually expand over the next few years, while maintaining the aspects of decentralization that we all know and love.