Not even a year and a half later, in 2019, block rewards got cut once more by a third to two ether per block. Thus, some investors feared that ether one day could share the same fate as fiat currencies, which are constantly inflated and lose their purchasing power over time.Īs a countermeasure, Ethereum cut its block rewards for miners in 2017 from five to three ether. But a steady inflow of new ether into circulation would eventually put pressure on the ether price. As a result, ether’s supply would grow every year through block rewards that were paid to miners. Unlike Bitcoin, Ethereum originally was designed as an inflationary currency with the ether supply not being fixed. Still, manufacturers have found ways around these limitations, as evidenced by specialized AISC-mining devices for Ethereum like the Bitmain Antminer E9 or the Innosilicon A10 Pro. Further, these measures help to keep the network as decentralized as possible. Through optimizing mining for GPUs, Ethereum developers have ensured that mining would still be possible for individuals with home-owned computers and rigs even after strong network growth and an increased difficulty rate. The reason for embedding such a restriction into Ethereum’s codebase was to limit the centralization of hashpower as seen within the Bitcoin network. This stands in stark contrast to Bitcoin, which nowadays is almost exclusively mined with ASICs. This has an impact on Ethereum’s mining process.Įthereum was purposefully designed in an ASIC – (specialized mining hardware) resistant way that only allows for efficient mining with graphics processing units ( GPUs) and rejects hashes from AISCs. ![]() Even though the Ethereum blockchain builds on Bitcoin’s innovations and ideas, its developers did not simply copy Bitcoin’s technology but made several fundamental modifications to fit Ethereum’s purpose best.
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