Which blockchain—Bitcoin or Ethereum—will be the first to reach the "zero net issuance" point, which is arguably the most crucial milestone for the circulating supply?
Two percent of Ethereum (ETH) supply destroyed for good
Mr. Wall has taken to Twitter to share his estimations of the effects EIP 1559 and corporate-driven aggressive purchases have had on the Ethereum (ETH) and Bitcoin (BTC) supplies.
EIP-1559 took 2% of the supply off the market for good. It was a bigger event than MicroStrategy which took 0.7% of BTC off the market (not really off the market, may have to sell). https://t.co/iItTDH8wpa— Eric Wall (@ercwl) June 5, 2022
As 2.4 million Ethers have been burned since the activation of the EIP 1559 upgrade (which allowed Ethereum to partially destroy transactional fees), 2% of the aggregated Ethereum (ETH) supply will never be available on the market.
Even amid the crypto recession, this monstrous sum is equivalent to $4.26 billion. At the same time, all MicroStrategy purchases erased just 0.7% of Bitcoin (BTC) supply—and this can be restored should MicroStrategy start selling its riches.
As such, Ethereum (ETH) approaches the ultimate scarcity milestone (zero net issuance point) far faster than the first cryptocurrency, Mr. Wall noticed:
Ethereum will likely reach 0% net issuance a full 100+ years before Bitcoin.
But is this good for Ethereum (ETH)?
However, it is still unclear whether the network will be able to keep its security when its node operators will be supported with nothing but transactional fees, which is among the "least reliable" sources of income.
Sergio Demian Lerner, chief scientist of Bitcoin-centric firm IOVLabs that attempts to leverage Bitcoin (BTC) as a consensus layer for smart contracts' settlement, highlights that EIP 1559 can also be lifted:
But EIP-1559 can be removed by a minority of miners to get all the fee revenue. Ultrasound money will make a lot of audible noise when it breaks.
As covered by U.Today previously, EIP 1559 was implemented during the London hardfork in August 2021.
Since 2019, it had been heavily opposed by Ethereum (ETH) mining pools.