ethereum - Ethereum’s Block Reward Reduced to 0.6 ETH – Vitalik Proposes 120 Million Hard Cap

Ethereum’s Block Reward Reduced to 0.6 ETH – Vitalik Proposes 120 Million Hard Cap

In a publication made by Ethereum, they explain that the block reward would be reduced from 3 ETH to 0.6 ETH per block for Proof of Work miners. This is part of the stage one of Friendly Finality Gadget Casper (also known as FFG Casper), a hybrid Proof of Work (PoW) and Proof of Stake (PoS) upgrade.

At the same time, Vitalik Buterin has proposed to create a hard cap for Ethereum that would be around 120 million ETH. It is not the first time that Vitalik comments about this possibility to establish a hard cap for Ethereum.

Reduced Reward for PoW Miners

According to the publication released by Ethereum, the block reward will be reduced 80%. At the same time, additional PoS mechanism will be added. Vitalik BUterin ethereum creator 300x187 - Ethereum’s Block Reward Reduced to 0.6 ETH – Vitalik Proposes 120 Million Hard Cap

The statement reads as follows:

“In this proposed spec for stage 1 Casper, Ethereum will transition from pure proof of work to hybrid PoW/PoS. In this scheme, all proof of work mechanics will continue to exist albeit with a reduced block reward (0.6 ETH), but additional proof of stake mechanism will be added. In particular, the fork choice rule will be modified to take these mechanics into account.”

At the moment, there is no specification about the block reward for stakes. Considering the reduced cost of staking, the reward may be less than 2.4 ETH.

Vitalik Proposes 120 Million ETH Hard Cap

Vitalik Buterin has also proposed a hard cap for Ethereum of 120 million ETH. The main purpose is to ensure the sustainability of the platform.

Vitalik Buterin wrote as follows:

“In order to ensure the economic sustainability of the platform under the widest possible variety of circumstances, and in light of the fact that issuing new coins to proof of work miners is no longer an effective way of promoting an egalitarian coin distribution or any other significant policy goal, I propose that we agree on a hard cap for the total quantity of ETH.”

In the post he wrote, he suggests a max supply equal to 120,204,432 ETH. That’s the exactly two times more the amount of ETH sold in the original ether sale. As Buterin explains, the implementation could occur during the next Ethereum hard fork.

Additionally, Vitalik Buterin recommended another number 144,052,828 ETH, that is two times the total amount of ether released in the genesis block including the sale and premines.