Advertisement
AD

Main navigation

Ethereum to Experience "Triple Halvening" Phenomenon, What Is It?

Advertisement
Tue, 9/08/2022 - 8:17
Ethereum to Experience "Triple Halvening" Phenomenon, What Is It?
Cover image via unsplash.com

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

Read U.TODAY on
Google News

Ahead of the Merge update that will turn off the PoW consensus mechanism for good, Ethereum is facing a "once-in-a-lifetime" phenomenon marked as a "Triple Halvening." Blockchain engineer Montana Wong explains what this really is.

Advertisement

Halvening itself is a concept applied to the Bitcoin mining algorithm that reduces the amount of coins awarded in each block by half every few years. The concept creates deflationary pressure on the price of the asset on the market, as miners provide less selling pressure because of the decreased supply in their hands.

Related

The halvening follows the simple economic rule of supply and demand, which is why we are seeing the start of a bull cycle prior to the halvening.

Advertisement

What about Ethereum?

Instead of the automatic reduction of miner rewards, Ethereum uses software updates that the community approves or disapproves of. With the help of manual updates and a couple of EIPs, block rewards for ETH miners dropped from 5 to 2 ETH.

Currently, Ethereum blockchain miners produce 6,500 new blocks every day, which gives us around 13,000 ETH issuance. With the Merge update, Ethereum's issuance is going to drop exponentially, and this ‌is under the radar of most retail investors.

Annual issuance of ETH is going to drop from 4.3% to 0.4%, which is around a 10x reduction in selling pressure from miners. In addition to the absence of mining, the Ethereum supply is constantly reduced with the help of the burning mechanism and the supply reduction due to staked ETH being locked as there are no withdrawals implemented yet.

Three forces combined: drop in issuance, burning and the ETH lock create a "Triple Halvening" phenomenon that will most likely have an enormous impact on the coin's future.

Related articles

Advertisement
TopCryptoNewsinYourMailbox
TopCryptoNewsinYourMailbox
Advertisement
Advertisement

Recommended articles

Latest Press Releases

Our social media
There's a lot to see there, too

Popular articles

Advertisement
AD