Summary: While Bitcoin's price rally has dominated crypto conversations over the past two weeks, the community took a break to open a new debate between the two leading crypto camps, Bitcoin and Ethereum. The question crypto enthusiasts sought to answer is whether or not there is a verifiable, independent way to determine the total supply of ...
The question crypto enthusiasts sought to answer is whether or not there is a verifiable, independent way to determine the total supply of ETH. Bitcoiners were determined to show that the task is impossible, while Ethereum supporters fought back claiming that establishing ETH total supply is possible and potentially not relevant.
Bitcoin's total supply is easily verifiable because its protocol has an automatic mechanism to calculate the metric, meanwhile the number is more difficult to conjure for Ethereum. The relatively straightforward nature of calculating Bitcoin's total supply — though individuals attempting to calculate it can run into errors if they fail to count rewards not collected by miners or coins that have been lost — has led Bitcoin supporters to attack the second largest cryptocurrency for not having a predetermined way to report total supply. One of these Bitcoin supporters was co-founder at Morgan Creek Digital Anthony Pompliano who chimed into the debate in a tweet.
The other key difference between Bitcoin and Ethereum is that Bitcoin has a finite supply — capping at 21 million — while Ethereum's supply increases annually with no cap. But even with the absent cap, Ethereum supporters argue one can calculate ETH total supply and several developers set to work to prove it, especially after Bitcoin lobbyist Pierre Rochard attached a reward to anyone able to successfully run code against their own ETH node within 12 hours of his tweet. In response, systems engineer Marc-Andre Dumas wrote a script to calculate total ETH supply and collected the reward.
Dumas code did have some errors that led to the amount of ETH being overshot, but the bugs were quickly rooted out and addressed. Dumas' efforts demonstrated why calculating Ethereum's total supply is more complex than determining Bitcoin's. When calculating ETH supply developers need to take into account genesis and mining rewards, rather than only mining rewards. Ethereum also has uncle rewards which are provided to blocks that are almost added to the blockchain but don't make it. These rewards are difficult to account for, but critical for determining an accurate count. The ETH supply also updates more frequently than BTC with Ethereum processing 40 blocks every 10 minutes compared to Bitcoin's 10 meaning the total ETH supply changes every 15-30 seconds.
Several crypto data sites including Coinmarketcap and Etherscan have their own ways of determining ETH total supply, but the numbers can vary depending on several factors. The discrepancies between sites provided ammunition for Bitcoin supporters eager to argue that ETH total supply is impossible to calculate, though estimates across sites hover around 112 million ETH.
While Ethereum supporters set out to prove total supply could be determined, many argued that the metric was never relevant in the first place, adding that traditional assets like gold or the U.S. dollar cannot provide a total supply number. The two camps may value the total supply metric differently because the blockchains have different goals. While Bitcoin is imagined as the world's new digital currency, Ethereum was designed to provide a platform for decentralized apps with ETH essentially serving as a usage token.
This means that Bitcoin's 21 million hard cap is important for arguing its value as an asset, especially as supporters use money printing amid the COVID-19 crisis to bolster Bitcoin's value as a safe haven asset similar to gold. For Ethereum, total ETH supply is far less relevant for arguing its value.
Crypto leader Andreas Antonopoulos took to Twitter on Monday, August 10 to put the argument to bed. His thread addressing the debate emphasized the nuanced perspective necessary to answer the question and chastised so-called experts who took a partisan stand with the goal of invalidating Ethereum.
It is unlikely this will be the last dust up between Ethereum and Bitcoin communities, but for now the total supply debate seems to be winding down.
By Emily Mason