Ethereum: Bitcoin’s uncertain future and the potential of a limited supply

The rise of Ethereum has caused intense interest in cryptocurrency enthusiasts worldwide. One of the most pressing questions surrounding the digital asset is whether the number of bitcoins will continue to grow indefinitely, or if there will be a maximum total supply. In this article, we will explore the current state of things and discuss the possible implications for the value and adoption of Bitcoin.

Bitcoin’s supply: a constant flow

For those strangers, the concept of a “supply” in the cryptocurrency refers to the total number of currencies that may exist at a given time. In the case of Bitcoins, the supply is fixed through a process called mining. Miners use powerful computers to solve complex mathematical equations, which require significant computational power and energy. As a reward for their efforts, the miners are attributed to create new bitcoins.

The number of bitcoins in circulation has constantly increased over the years, and some estimates suggest that there will be around 21 million bitcoins available by 2025. However, this is not a fixed number, since new coins can still be created through mining and exchanges.

The work test enigma (Pow)

One of the main concerns surrounding Bitcoin’s supply is the continuous issue of the work test (POW). While Pow was introduced to encourage miners to ensure the network, it also comes with a significant environmental cost. The energy consumption required to extract bitcoins has become a great concern for sustainability and climate change.

As the number of miners grows, so do energy requirements. In 2020, Bitcoin’s energy consumption reached a historical maximum of more than 150 TWH (Terawatt-Hours), which is equivalent to approximately 20% of the total electricity production in Germany. The Pow’s environmental impact has led to generalized criticism and demands alternative work test systems or even a permanent hard limit on the new bitcoins.

Ethereum fusion: a potential solution

In response to the growing concerns about Bitcoin’s supply, Ethereum has been working to create a more sustainable alternative. The next fusion of the Ethereum Mainnet with its side chain will allow the transition of Pow to the tobacconist (POS), a more efficient consensus algorithm in energy.

The Ethereum team has announced plans to launch a new cryptocurrency called Algorand, which will use a similar consensus mechanism to ensure the network. However, it is not clear if this movement will have any significant impact on Bitcoin’s general supply or if it will lead to a permanent hard limit.

Will there be a limited supply?

While the next fusion of Ethereum can generate a certain relief of environmental concerns around Pow, the question of whether there will be a limited supply remains uncertain. There are some factors that suggest that this may not be the case:

• Theoretical limits : Some experts argue that the total number of bitcoins in circulation is theoretically unlimited, since new coins can be created through mining and exchanges.

• Incentive the miners to stop : If the POW became unchanging due to the increase in energy consumption or environmental concerns, it is possible that a permanent hard limit can be implemented in the new bitcoins.

However, there are also arguments that suggest that the number of bitcoins could be limited in some way:

• Regulatory pressures : Governments and regulatory bodies can impose limits on bitcoin transactions or even prohibit the use of cryptocurrencies completely.

• Environmental concerns : The growing energy requirements for Pow can lead to a permanent hard limit due to the pressure of environmental organizations.

Conclusion

The future of Bitcoin’s supply is uncertain, with both potential solutions that present valid arguments for and against.