Ethereum developers have green-lighted one of the biggest adjustments to their network since its creation back in 2015, a change that could trigger even bigger increases in the price of the Ethereum coin.
The change will lower the amount of the Ether coin by destroying some of its tokens every time it’s used in a transaction.
The change solves a problem: Ethereum holders can only estimate the amount of Ether that will be needed for a transaction to be completed.
But the new change, which will happen during an upgrade either in July or August, will put an average price into the network itself, making guessing a thing of the past.
The reduced amount of Ether will likely cause rising values as demand for the coin increases, said Eric Turner, a researcher at Messari, an analytics firm.
“This is maybe one of the largest steps we’ve seen,” he said. Before this change was approved this Friday, the amount of Ether was essentially infinite, leading to some people saying its underlying policy was inflationary. “Now, they are controlling the inflation on Ethereum” and “in some circumstances you’re looking at negative inflation,” Turner said.
Ether has been having an incredible price surge. Rising by around 560% in the past 12 months, while Bitcoin is up nearly 430%. Unlike Ether, Bitcoin has benefited from a fixed supply of coins since its start. That key difference had led some to say Ethereum should not be seen as similar to Bitcoin. But now, with this new change, Ethereum is finally on equal footing with Bitcoin when it comes to limited supply. And what happens next is anyone’s guess.