Friday, December 2, 2022

Converting ETH Into a Value Store? Buterin Mulls Burn Options

Converting ETH Into a Value Store? Buterin Mulls Burn Options

Ethereum’s wunderkind has no shortage of priorities, and in a new surprise interview, he declared one of his main goals is implementing a new burning system for ether. Buterin suggests “sinks,” or fees that will be destroyed. 

Also read: Bitcoin Price Reaches High of $7,700 Following Segwit2x Cancellation

Join the Bitsonline Telegram channel to get the latest Bitcoin, cryptocurrency, and tech news updates:

Aside from the Parity multi-sig library “kill” debacle, Ethereum creator Vitalik Buterin has plenty of things to worry about. And, self-admittedly, one of Buterin’s growing focuses is on how to start effectively burning ether’s supply—currently capped at around +95 million coins.

As the ICO craze continues to veer into larger, riskier proportions, Buterin’s been considering the grander problems of the space as of late.

Per Buterin, he’s accordingly become enchanted with bolstering the value of the ether cryptocurrency further by applying a burn model to the network:

“If [a] token is being burned, then you have an economic model that says the value of the token is the net present value of basically all future burnings […] I’m concerned a lot of these token models aren’t going to be sustainable.”

As Buterin went on to explain, cryptocoins without a smaller hard limit are increasingly “spooky” to him:

“It’s just a currency that goes up and down. It feels kind of like voodoo economics and the price of the token isn’t really backed by anything. That’s a very spooky thing.”

It’s this spookiness, then, that Buterin wants to move his brainchild project away from.

Buterin speaking on the future of Ethereum.

Buterin Suggests “Sinks” As The Future Of Ether

Buterin’s recommendation?

To implement “sinks” that would collect fees from transactions on the Ethereum network and thereafter destroy, or “burn,” these fees—in effect lessening the overall supply of available ether:

“Introducing some kind of sinks into ethereum is definitely something we’re looking at. By sinks, I mean fees that lead to the token actually being destroyed […] It’s […] definitely informing a lot of design choices.”

Another alternative possibility is the idea of “staking” away circulating ether instead of burning it, which will become possible once Eth’s devs implement the Casper update. It’s not clear, though, if staking will lock away the amount of ether that Buterin’s looking for.

It’s quite possible, after all, that a burn system will be added even after Ethereum moves to Proof-of-Stake (PoS).

What’s your take? Is “sinking” away fees a step toward making ether a better value store? Sound off in the comments below!

Images via El Confidencial, Aeon

Bitsonline Email Newsletter