Ethereum: almost 10 ETH burned per minute yesterday
Ethereum: almost 10 ETH burned per minute yesterday
Crypto

Ethereum: almost 10 ETH burned per minute yesterday

By Marco Cavicchioli - 8 Sep 2021

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It was another deflationary day for Ethereum yesterday. Indeed, since the introduction of the London update, some of the fees paid by those who send transactions to the Ethereum blockchain are being burned

These days, not all fees are collected by miners, some are burned forever. 

Ethereum’s ETH are now being burned

Yesterday, for example, an average of 9.67 ETH per minute was burned, equivalent to about $33,000 at yesterday’s exchange rates. 

This updated data is published by WatchTheBurn.com and for each mined block the amount of ETH burned is indicated. 

Since this new rule came into effect, a total of more than 238 ETH have been burned, with a dollar value of more than $771 million, compared to about 456 ETH in rewards distributed. 

The pace at which the fees are being burned is decidedly fast, so much so that ETH, like BTC, could become a cryptocurrency with a deflationary nature at this point. 

For now, however, the number of ETH in circulation is continuing to increase, albeit much more moderately than in the past. 

According to data from Ycharts.com, while from June 7 to August 1, the circulating supply of ETH rose from 116.21 million to 117.13 million, from August 2 until yesterday it only increased to 117.44 million, which is a mere 0.26% in just over a month, while in the previous almost two months it had increased by 0.79%. 

The reduction therefore is sharp, although not yet able to turn ETH into a deflationary cryptocurrency. Doing the math, while in June and July the ETH supply increased by an average of about 16,727 ETH per day, from 2 August until yesterday it only increased by an average of 5,636 ETH, or a whopping 66% less. 

With London fork, ETH’s supply isn’t decreasing

London and the inflation of Ethereum

For now, the London update has drastically reduced the money supply inflation of Ether, the cryptocurrency of the Ethereum network, but has not yet been able to make it a deflationary cryptocurrency, as its money supply is continuing to increase. 

The reduction in inflation of ETH’s money supply has been sharp. Assuming it continues to increase by about 5,600 ETH per day, only just over 2 million ETH would be added in a year, or 1.7% of the current supply. Moreover, this percentage is bound to decrease further in the future. 

At the moment, it is difficult to predict exactly when it might approach 0%, but to be honest, even the 1.7% that is possible to imagine already today is definitely very low, especially compared to the historical rate recorded by ETH since its inception in 2015 until today. 

The money supply of Ethereum vs Bitcoin

It is worth noting that a certain number of ETH are lost all the time anyway, due to the loss of the private keys needed to use them, so even with a theoretical inflation rate of more than 0%, a deflationary money supply could still be achieved. 

As far as Bitcoin is concerned, to date the BTC money supply is increasing by about 1.75% per year, but every four years this increase actually halves. The next halving, which will take place in 2024, will bring this annual increase below 1%, and within a few decades it will be very close to 0%. 

This comparison shows that ETH already has a similar level of inflation of its money supply to BTC, although in the future it is possible that the reduction in these inflation levels may be greater for BTC than for ETH. 

 

Marco Cavicchioli

Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".

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