For many years, Ethereum was the second largest cryptocurrency. Today we will talk about what is the Ethereum “Triple Halving” and what will happen with Ethereum Triple halving. Let’s find out by reading the article below.
What is the Ethereum “Triple Halving”?
Let's start with the name itself, "halving" refers to a concept in the Bitcoin algorithm that implicitly cuts in half the portion of Bitcoin rewarded to miners every few years. The purpose of this is to reduce the distribution rate of BTC over time and create "deflationary pressure". This alleviates BTC sell anxiety for miners trading their BTC rewards. As a result, this drives up the price of BTC as the supply in the market decreases. Historically, Bitcoin halving events have been directly correlated with the start of crypto bull cycles.
So Ethereum's distribution of ETH under Proof of Work functions slightly differently today. Instead of an algorithmic reduction in miner ETH rewards (i.e. the issuance rate), it does so through community-decided software updates:
- Genesis to 2017: 5 ETH
- 2017-2019: 3 ETH (changed via EIP-649)
- 2019-present: 2 ether (changed via EIP-1234)
What will happen with Ethereum triple halving?
With the implementation of Proof of Stake, selling pressure is expected to drop by almost 30%. The proof-of-stake mechanism encourages miners to sell ETH after receiving rewards. Proof-of-stake and triple halving, on the other hand, encourage miners to use their ETH rewards for staking activities.
The triple halving is almost equivalent to three Bitcoin halvings, reducing ETH inflation from 4.3% to 0.43%. In addition to this, the daily block reward is also reduced to one-tenth.
To summarize, the ETH triple halving results in:
- High network stability.
- A more secure and stable network.
- Increased scarcity of ETH.
- Less energy consumption.
I hope this article will help you to learn what is the Ethereum “Triple Halving” and what will happen with Ethereum Triple halving. The distribution of ETH under the proof-of-work protocol is slightly different from the Bitcoin halving. Ethereum's algorithm does not reduce the ETH rewarded to miners. The process is performed using software updates approved by the Ethereum community.
