Ether (ETH), the cryptofuel that powers distributed applications on the Ethereum platform, will be issued at a constant annual linear rate via the block mining process.This rate is 0.3 times the total amount of ETH that will be purchased in the pre-sale.While the best metaphor for ETH is “fuel for running the contract processing engine,” for the purposes of this post, we will treat ETH purely as a currency.There are two common definitions of “inflation.”  The first relates to prices and the second relates to the total amount of money in a system – the monetary base or supply.Similarly for the term “deflation.”  In this post we will distinguish between “price inflation,” the rise in the general price level of goods and services in an economy, and “monetary inflation,” the growth in the supply of money in an economy due to some sort of issuance mechanism.Often, but not always, monetary inflation is a cause of price inflation.Though the issuance of ETH is in a fixed amount each year, the rate of growth of the monetary base (monetary inflation) is not constant.

This monetary inflation rate decreases every year making ETH a disinflationary currency (in terms of monetary base).Disinflation is a special case of inflation in which the amount of inflation shrinks over time.It is expected that the amount of ETH that will be lost each year caused by transmissions to addresses which are no longer accessible is estimated to be on the order of 1% of the monetary base.ETH may be lost due to loss of private keys, death of owner without transmission of private keys, or purposeful destruction by sending to an address that never had an associated private key generated.If we assume that Ethereum sells 40,000 BTC worth of ETH in the pre-sale, and if we assume that the average price is 1500 ETH/ BTC, 60,000,000 ETH will be created in the genesis block and assigned to purchasers.Every year, in perpetuity, 18,000,000 ETH will be issued though the mining process.Taking into account both creation of new ETH and loss of existing ETH, in the first year, this represents a monetary inflation rate of 22.4%.

In the second year the rate drops to 18.1%.By the tenth year, the rate is 7.0%.In year 38, it hits 1.9%.And in the 64th year, the level of 1.0% is reached.By approximately the year 2140, the issuance of BTC ceases and since some BTC will likely be lost each year, the monetary base of Bitcoin is expected to start shrinking at that point.buy bitcoin edmontonAt approximately the same time, the expected rate of annual loss and destruction of ETH will balance the rate of issuance.bitcoin pool without registrationUnder this dynamic, a quasi-steady state is reached and the amount of extant ETH no longer grows.litecoin 5 gpuIf the demand for ETH is still growing at that point due to an expanding economy, prices will be in a deflationary regime.dogecoin well

This is not an existential problem for the system since ETH is theoretically infinitely divisible.As long as the rate of price deflation is not too rapid, pricing mechanisms will adjust and the system will operate smoothly.litecoin mining youtubeThe traditional main objection to deflationary economies, wage stickiness, is likely not to be an issue since all payments systems will be fluid.ethereum mac osAnother frequent objection, borrowers forced to repay loans with a currency that grows in purchasing power over time, will also not be a problem if this regime is persistent, since terms of lending will be defined to account for this.bitcoin price in sgdNote that while the monetary inflation remains greater than zero for many years, price levels (tracked as price inflation and deflation) are dependent on supply and demand, so are related to, but not totally controlled by the rate of issuance (supply).litecoin mining rig hardware comparison

Over time it is anticipated that growth of the Ethereum economy will significantly outpace growth of the supply of ETH, which could lead to an increase in the value of ETH with respect to legacy currencies and BTC.100 lei bitcoinOne of Bitcoin’s great value propositions was the algorithmically fixed total issuance of the currency which mandated that only 21,000,000 BTC will ever be created.In a time of profligate legacy currency printing in an exponentially doomed attempt to patch over the fact that there is too much debt in the global economic system (with more debt), the prospect of a universally accepted cryptocurrency that can serve eventually as a relatively stable store of value is attractive.Ethereum recognizes this and seeks to emulate this core value proposition.Ethereum also recognizes that a system intended to serve as a distributed, consensus-based application platform for global economic and social systems, must strongly emphasize inclusiveness.

One of the many ways we intend to foster inclusiveness is by maintaining an issuance system which possesses some churn.New participants in the system will be able to purchase new ETH or mine for new ETH whether they are living in the year 2015 or 2115.We believe we have a achieved a good balance between the two goals of fostering inclusiveness and maintaining a stable store of value.And the constant issuance, especially in the early years, will likely make using ETH to build businesses in the Ethereum economy more lucrative than hoarding speculatively.Ethereum Sign up or log in to customize your list._ Here's how it works: Anybody can ask a question Anybody can answer The best answers are voted up and rise to the top up vote down vote favorite 7 In Bitcoin, the total supply is capped at 21 million BTC.Is the total supply of Ether capped?How much will be mined before the Proof of Stake (POS) transition, and how will POS affect the issuance model?

mining ether proof-of-stake proof-of-work up vote down vote From reddit post 60 million + 12 million + 18million = ~90million 60 million - is the Pre-sale.12 million - is the dev fund, 0.2coins per 1 coin sold in the crowdsale.~18 million - 1 million coins mined per month for 18 months prior to going from POW to POS.Update: 91,018,773.78 ether in circulation (April 25, 2017) Some discussions /discussion/46/total-supply-of-eth https://etherscan.io/stat/supply inflation After a while, 15,626,576 ether won't represent much of the total ether available, making the system dis-inflationary (i.e., inflation perpetually trending towards 0 but never reaching it).up vote down vote The issuance model is not fixed yet.It is an ongoing discussion whether or not the costs for the consensus needs to be financed by inflation that basically taxes every coin holder or if transaction fees are sufficient.Please note that the costs for secure consensus are much lower with Casper compared to current proof of work.

More details here For this reason it is guaranteed, that the current issuance amount will not be increased and might even drop to 0.Another ongoing discussion is whether or not issues of new coins should be used to fund ongoing development.A prerequisites for this would be a DAO with a widely accepted mechanism to control spending of funds effectively.But also in this case the newly issued coins would not increase.up vote down vote From StephanTaul on the Ethereum Forums on September, 2014: There is no maximum.60,102,216 ethers were created during the sale, plus 2x pools of 9.9% each.26% of 60,102,216 will be created through mining every year.This means that 15,626,576 will be created every year on top of the 60m and the two pools.After a while, 15,626,576 ether won't represent much of the total ether available, making the system dis-inflationary (i.e., inflation perpetually trending towards 0 but never reaching it).up vote 6 down vote After the implementation of Casper, I believe the rate is expected to be fixed and miners will earn from both mining fees and fees offered up in other on-chain tokens or currencies/assets.