The number of ether coins inside the ethereum blockchain is theoretically unlimited. But if the developers had not provided mechanisms for regulating their number, over time the number of tokens would become too large. This would cause ETH to inflate and depreciate against other cryptocurrencies and fiat money. Consider whether there is a limit on the number of tokens in circulation.

Features of the release of Ether coins

Ethereum was originally created not only as an environment for the functioning of the cryptocurrency. This is a universal blockchain on which decentralized applications can be run. On its basis, smart contracts can function, with the help of which complex interactions between participants are implemented. Thanks to these features, Ethereum has become the second largest currency in the world by capitalization, and the cost of one ether exceeds $3,000.

In the cryptocurrency sphere, there are three ways to issue coins:

  • Primary placement. The creator of the blockchain emits a certain number of coins at the start of the “chain of blocks” and distributes them at his discretion. Further, it is impossible to mine new money in the blockchain.
  • Limited issue. The issuance of bitcoins is based on this principle. The algorithm has the ability to mine 21 million units of bitcoin, after which their release will stop. Only this money will be in circulation.
  • Unlimited emission. In the blockchain, you can issue any number of coins. Ethereum belongs to this type of system. That is, it is impossible to say in advance how many Ethereum coins will be in circulation in the future.

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Extraction and destruction of coins

Ethereum is currently being issued by mining, although a transition to PoS consensus is expected in the near future. That is, it will be possible to mine coins by storing them on the user’s wallet.

But there is a potential problem of issuing too many coins. If this happened, then the value of each coin would gradually fall. Its rate would decrease and crypto investors would suffer losses.

To prevent this situation, the creators of the blockchain have provided a mechanism for the destruction of part of the issued money. They are “burned” in the following cases:

  • When performing transactions within the system. The base commission is destroyed, and the miners receive only a tip.
  • When forming NFT tokens. At the same time, the ethers burn out, but a non-fungible token is formed.
  • When deploying smart contracts and in other situations provided by the developers.

Burning occurs by sending coins to a non-existent wallet address on the network.

Now the number of ether coins is increasing, as mining is faster than burning. But after the transition to PoS, the opposite situation will arise. As a result, the token will become deflationary, which will lead to a gradual increase in its rate.