The Ethereum blockchain is a distributed system designed to run decentralized applications and deploy smart contracts. To ensure its operation, a native coin is used – ether. It is an integral part of the ecosystem, used for payments between participants and service needs. In this article, we will analyze how many Ethereum coins will be issued, how many are in circulation and how they are received.

Mining

From the point of view of computer algorithms, a blockchain is a database in which records are stored in the form of interconnected blocks. For it to work, it is necessary for one of the blockchain users to form these blocks and keep a copy of the database for themselves. The more such participants, the more powerful the system and the less vulnerable it is to external attacks.

Such participants are called miners. Ethereum is used to pay for their work. That is, when a new block is attached to the blockchain, the miner is rewarded in the form of ETH. This process leads to emission. The more powerful computers the miner bought, the more likely it is to form a block.

At first, Ethereum was easy to mine, but over time, the complexity of mining increases. That is, the rate of ether emission decreases. But the blockchain does not contain a restriction on the issuance of coins. That is, it is impossible to say how much ether will be released in a month, a year or ten years.

Destruction

To eliminate inflation, in the London hard fork, the developers made changes to the commission calculation mechanism. According to the new algorithm, part of the commission is burned to prevent the coin from falling in relation to other cryptocurrencies. Thanks to this mechanism, which the creators launched at the end of last summer, the blockchain destroyed about 400 thousand ethers in just a month.

Due to the simultaneous emission and burning, it is impossible to calculate the exact number of coins in circulation with high accuracy. To do this, you can use services on the Internet or a script that Vitalik Buterin himself posted on GitHub. If we turn to one of the methods, we can find that the number of coins varies from 112 to 118 million pieces.

Now mining is faster than “burning”, so the number of tokens is increasing.

Alternative to mining

PoW consensus, which is currently used in the Ethereum network, is an energy-intensive and expensive mining method. Therefore, blockchain developers have begun the process of switching the platform to PoS consensus. Thanks to this algorithm, emission will occur by staking. The formation of blocks and their validation will take place on the basis of the coins that are stored in the wallets of the validators.

As a result, the rate of issuance of new coins will decrease. And Ethereum will become a deflationary asset