Ethereum just lost one if it's biggest bragging points, and its transition from a deflationary to an inflationary asset marks a potentially pivotal moment in its trajectory. While the platform continues to be a dominant player in the decentralized finance (DeFi) space, these economic and market shifts warrant close observation by investors and stakeholders. 

What Happened?

Ethereum's shares the most common cause of currency inflation with governments around the world, specifically when they print too much money. There have been 68,000 new ETH issued, compared to its burning 38,000 ETH over the last 30 days - add this excess together with a bearish month, and the additional supply enters the ecosystem as inflation.

Ethereum has a system where a portion of the transaction fees (or "gas") is burned, reducing the overall supply of ETH, while another portion compensates validator nodes.

Typically this causes ETH to be deflationary - that is, when network activity is stronger, the amount of ETH burned can surpass the amount issued.

Some Perspective...

It's crucial to note that Ethereum's annual inflation rate remains relatively subdued at 0.3%, especially when compared to Bitcoin's 1.6% and certain fiat currencies, which hover around 3.7%.

Bitcoin has been categorized as inflationary due to its capped supply of 21 million coins and the halving of its block rewards approximately every four years, which restricts its issuance and, by extension, its inflationary potential. In contrast, fiat currencies, like the US dollar, can be issued without an upper limit, leading to inflation when the supply outpaces demand.

So, while 0.3% is an insignificant amount and there's no need for investors to modify their outlooks, yet, this is something worth keeping an eye on.  Unless hit with large downturn (which I haven't seen anyone predicting) Ethereum can re-take it's 'deflationary' title fairly easily. 

Plus, For the First Time in YEARS - Ethereum Users Didn't Pay the Most in Total Transaction Fees...

Another interesting thing stood out when reviewing Ethereum's previous month - a significant drop in total transaction fees. After 3+ years embarrassingly high, sometimes absurd fees - this is a good thing.

In the last 30 days, the Tron network generated $87.4 million in fees and $65.8 million in token incentives, resulting in net profits of $21.6 million. Ethereum, on the other hand, generated $82.2 million in fees but offered token incentives of $82.9 million, leading to losses of $20.6 million. "There's a lot of projects taking direct aim at Ethereum, with their main goal being to transfer some of ETH's market share to themselves' said one blockchain consultant on Reddit.

Other platforms including Lido Finance ($46.9 million), friend-tech ($30 million), Bitcoin ($27 million), Uniswap ($23 million), Aave ($8.8 million), and BNB Chain ($ 8 million), surpassed Ethereum in generating fees.

Story Published Sept 10

Update Added Sept 16: Jump to update

In a shocking turn of events, Vitalik Buterin's official Twitter account was compromised by hackers on Saturday, September 9, 2023. The breach led to a loss of nearly $700,000 in cryptocurrencies, highlighting the vulnerabilities even high-profile figures face in the digital realm.

The Deceptive Tweet

The hackers, with just a single tweet, managed to deceive a significant number of Buterin's followers. The tweet announced a purported free NFT giveaway from Consensys, a renowned blockchain technology company.

Many followers, seeing the tweet from the official account of Ethereum's creator, were lured into a trap. The link provided in the tweet redirected users to a malicious website designed to exploit their trust.

This type of scam, known as a 'drainer' tricks users into connecting their cryptocurrency wallets to a seemingly legitimate website. Once connected, the hacker can then transfer all assets from the victim's wallet to their own.

High-Value NFTs Stolen

In addition to the stolen cryptocurrencies, the hackers made away with two high-value 'Crypto Punks' NFTs. These digital collectibles have gained immense popularity and value in recent years.

The stolen NFTs were priced at a staggering 153.62 ETH (approximately USD 250,000) and 58.18 ETH (USD 95,000) respectively.

Update: 

We finally have a response from Vitalik, apparent a sim swap was the method used.

Considering this involves ;social engineering' AKA fooling an employee of the phone company in to switching a phone line from the legitimate customer to phone controlled by the hacker.

While the hacker is blame,, at least a little of the blame  must go to T-Mobile whos employees should be properly trained to spot a scam that is several years old.

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File this article under "stating the obvious" but unfortunately, BitConnect's user base somehow keeps growing.

Ethereum's creator Vitalik Buterin responded to a tweet today from a Twitter user goes by the name "Ponzi crypto coins" who appearently prides himself in calling out scam coins, tweeted at him:

I actually have no idea what bitconnect is.

— Vitalik Buterin (@VitalikButerin) November 2, 2017

After telling Vitalik Bitconnect's promises of 1% daily returns, Vatalik stated (the obvious) - it's a ponzi scheme (AKA pyramid scheme).

Yeah, if 1%/day is what they offer then that's a ponzi.

— Vitalik Buterin (@VitalikButerin) November 2, 2017

The collapse is coming, eventually.

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Author: Oliver Redding
Seattle News Desk

Ethereum creator Vitalik Buterin along with Jason Teutsch, creator of TrueBit published a whitepaper outlining a concept they're calling "interactive coin offerings".

It's purpose is to address the most complex issue in the world of cryptocurrency: price evaluations of a new coin.

This comes towards the end of a year when countless ICO's with completely worthless tokens sucked in millions of dollars with expensive marketing campaigns hyping up their new coin, simply to collapse weeks later.

The solution they propose comes in two parts.

First - no limits can be set on the amount of money an ICO raises. While at first that doesn't sound like a way to clamp down on someone using an ICO as a money-grab, it addresses a problem with human nature.  FOMA - fear of missing out.  One of the methods ICO's use to get lots of money fast is making people feel like their new coin is going to be huge, but once they've raised $50 million - the sale is going to be over - so you better act fast!

This concept addresses another issue as well, "Whales" (large investors) buying up a huge portion of the limited supply.

Second - the boldest idea - allowing people to pull out of an ICO and get their money back. “Potential buyers may enter and exit the crowd sale based on behaviors of other buyers, and in doing so tend the valuation towards a market equilibrium.”

This second step would require the first step to be implemented, as this would mean each ICO would have a date range to buy in, or pull out, instead of a market cap.  It's during this period people can buy in, or change their mind.

Obviously, once the new currency goes live you could no longer pull out.  This would not be a way to ditch a coin that's failing and get your original investment back.

You can read Buterin and Teutsch's full whitepaper here.

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Author: Ross Davis
San Francisco News Desk

To date it's the most in depth presentation Vitalik has given on his vision and what he thinks is next for blockchain technology.

While this speech was given in April, it didn't get much attention at the time.  Absolutely worth a watch if you're looking to expand your knowledge base.

Tech Crunch may have gone a bit too far in their excitement for Ethereum.  Following an interview with its creator Vitalik Buterin, Tech Crunch launched tweets and articles that caught some eyes.

The claim was: Vitalik made the bold prediction of Ethereum not just becoming a foe for Visa, but completely overthrowing it, or in their words, it would "replace visa".

Vitalik took to twitter, noticeably frustrated to clarify:

For the record: I said ethereum (+plasma et al) *will have Visa-scale tx capacity*, not that it will "replace Visa". Sigh.

— Vitalik Buterin (@VitalikButerin) September 18, 2017

Tech Crunch has now issued a correction.

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Author: Ross Davis
San Francisco News Desk