Ethereum will be reducing its block reward from 3 ether to 2 ether in its transition from Proof of Work (PoW) to Proof of Stake (PoS). The information has been released today at the Ethereum Core meeting on August 31st.
The Ethereum Improvement Proposal (EIP) 1234 will be reducing the block reward on the Ethereum network to 2 ETH.
Shortly after, the twitter user @spensernoon tweeted the information.
BREAKING: Ethereum block reward to be reduced to 2 $ETH per block in Constantinople hard fork
— Spencer Noon (@spencernoon) August 31, 2018
This is very important because the reward reduction will take place during the next October, within the Constantinople update. The main intention behind this improvement in Ethereum’s network is to reduce the inflation of the currency. The proposal 858 aimed at bringing down the rewards to 1 ETH per block, but it lost against the EIP 1234.
The reduction will have to wait until Constantinople is implemented in the network. Now, each block continues with a reward of 3 ETH.
Additionally, the EIP 1234 pushes back another year the so-called difficulty bomb. This bomb is an arbitrary mining difficulty that would make participants move towards Proof of Stake.
Of course, the proposal talked about other important topics related to technical EIPs.
At the moment, Ethereum is the second most important virtual currency in the market. Each coin can be bought for $282 dollars and its market capitalization is $28 million dollars.
The Chicago Board Options Exchange (CBOE) is also considering launching the first mainstream market for Ethereum. This is very important because it legitimizes the famous virtual currency and puts it in a position of privilege compared to other cryptos.