Ethereum (CRYPTO:ETH)- the world's second-largest cryptocurrency, and the most popular smart contract and decentralized application network -- just changed the way it pays the people who maintain its network, in ways that could make it an even more appealing investment. When the next major evolution in its upgrade roadmap occurs, this change could reduce its supply and increase its value. That might be great news for investors seeking to hedge against inflation.
How Ethereum's changing its network
Since Aug. 5, a portion of the fees paid by users of Ethereum's network, which used to go toward making new coins with which to pay miners, has instead been burnt or destroyed. A total of 177,424 ETH, worth around $672 million at the time of writing, has been taken out of circulation since the upgrade, leaving 117.3 million tokens in circulation according to CoinMarketCap. By taking coins out of circulation, this change could make each existing coin more valuable.
Ethereum is currently produced by miners under a proof-of-work consensus mechanism that consumes a lot of energy, just like Bitcoin (CRYPTO:BTC) production. It has a variable annual inflation rate of around 2.8% at the moment -- but it'll issue fewer new coins when it upgrades its network to a staking-based consensus.
Instead of solving tough math problems to keep the network running smoothly -- and getting rewarded for it -- Ethereum holders will be able to do the same things by storing away, or staking, some or all of...
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