Ethereum (ETH) Team Proposes Block Reward Cut after Constantinople Hard Fork
The Ethereum network is still working out its economics and attempting to optimize mining, but some see the reward reduction as a move to boost ETH prices.
The Ethereum (ETH) network is preparing for the Constantinople hard fork, which will come with a reduction in rewards to 2 ETH per block. This was one of the decisions Ethereum developers took in a recent meeting which did not feature founder Vitalik Buterin:
The Constantinople hard fork is supposed to be one of the final steps before Ethereum moves into the proof-of-stake stage. However, mining will continue for an indefinite period with a reduced reward. The Byzantium fork from October 2017 lowered the block reward from 5 to 3 ETH.
Some see the move as effectively an attempt to drive up the ETH market price. However, the potentially lowered supply would take years to produce an effect.
The developer meeting reached no consensus on disabling ASIC mining for Ethereum. For now, the Ethereum network will delay the difficulty time bomb, meaning that mining would continue for longer than expected. Ethereum will be predominantly minable for another 12 months. For now, the 2 ETH block reward has not been implemented. A date has yet to be picked for the Constantinople hard fork, which is expected to bring the Ethereum network closer to proof-of-stake. Another meeting is scheduled in two weeks for further discussion on network changes.
The ETH market price has been persistently depressed due to the inherent selling pressure on the coin. Miners will always sell some amount to cover operational costs so unless coins are locked for staking, ETH will always have selling pressure. Additionally, it is being sold by ICO projects as startups seek to cover operating costs.
At the time of writing, ETH trades at $290.43. It broke above $300 only briefly on September 1 before sinking again. Ethereum development matters affect the price less as most of the changes are expected ahead of time.
While the Byzantium fork brought the biggest growth in ETH prices, the Constantinople fork will coincide with a bear market that has little enthusiasm for new purchases.
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