Ethereum's recent transition from a deflationary to an inflationary model has observed a slight increase of 0.178% in the past 17 days. In this timeframe, the network expanded its total supply by adding 22,502 ether, worth approximately $35.31 million.
Ethereum's Escalating Inflation Spurred by Dwindling Onchain Activity
Prior to the recent change, Ethereum was predominantly deflationary, driven by the EIP-1559 protocol of the London hard fork and the significant shift from proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism. However, the past few months have seen a considerable decrease in onchain activities.
As a result, the EIP-1559's fee-burning mechanism has been destroying fewer ethers. Just 17 days ago, Ethereum's issuance rate was mildly inflationary at an annual rate of 0.270%. As of the present, it has increased to around 0.448%, indicating a rise of 0.178%.
An Overview of the Rising Ether Supply
On September 24, 2023, the total supply of ether was recorded at 120,228,449. Fast-forwarding to 11:00 a.m. Eastern Time on October 11, 2023, this number has risen to 120,250,951. This surge signifies an additional 22,502 ether, worth $35.31 million, emphasizing the growing inflation rate.
Ethereum's Transaction Rate: A Closer Look
Ethereum's daily transaction rate has been largely stagnant, with layer two (L2) platforms gradually eroding its activity. Recent data from bitinfocharts.com reveals an average transaction fee of 0.0012 ETH or $1.83 for Ethereum, a low not experienced since December 2022.
Going further, the median transaction fee of the network stands at 0.00046 ETH or $0.726, as per bitinfocharts.com. As of October 11, ultrasound.money reveals a burn rate of 0.57 ETH per minute, with a week's total of 5,783.55 ETH being burnt.
Ethereum's Burn Rate and Supply Addition
According to the data from ultrasound.money, a massive 3,633,752 ether has been destroyed since the inception of EIP-1559 797 days ago, maintaining an average burn rate of 3.17 ETH per minute. In the past week alone, the supply witnessed an addition of 10,321 ETH.
If the PoW mechanism had been sustained, the same figure would have risen to 88,724 ETH in a week, as depicted by the web portal's simulated PoW data.
What are your thoughts on the increasing inflation rate of Ethereum? Share your views and perspectives on this topic below.
Frequently Asked Questions
Is gold buying a good retirement option?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
For example, purchasing shares of companies that extract gold or mining equipment might be a better option if you aren't looking for a safe place to store your wealth. Owning gold stocks should work well if you need cash flow from your investment.
ETFs allow you to invest in exchange-traded funds. These funds give you exposure, but not actual gold, by investing in gold-related securities. These ETFs usually include stocks of precious metals refiners or gold miners.
What are some of the advantages and disadvantages to a gold IRA
An Individual Retirement Plan (IRA) has a major advantage over regular savings accounts. It doesn't tax any interest earned. An IRA is a great option for those who want to save money, but don't want tax on any interest earned. But, this type of investment comes with its own set of disadvantages.
For example, if you withdraw too much from your IRA once, you could lose all your accumulated funds. Also, the IRS may not allow you to make withdrawals from your IRA until you're 59 1/2 years old. If you do decide to withdraw funds from your IRA, you'll likely need to pay a penalty fee.
Another disadvantage is that you must pay fees to manage your IRA. Many banks charge between 0.5%-2.0% per year. Other providers charge monthly management charges ranging anywhere from $10 to $50.
Insurance will be required if you would like to keep your cash out of banks. Insurance companies will usually require that you have at least $500,000. It is possible that you will be required to purchase insurance that covers losses of up to $500,000.
If you choose to have a gold IRA you will need to establish how much gold to use. Some providers limit how many ounces you can keep. Others let you choose your weight.
You will also have to decide whether to purchase futures or physical gold. Gold futures contracts are more expensive than physical gold. However, futures contracts give you flexibility when buying gold. They enable you to establish a contract with an expiration date.
You also need to decide the type and level of insurance coverage you want. The standard policy doesn’t provide theft protection or loss due fire, flood, or earthquake. It does offer coverage for natural disasters. You may consider adding additional coverage if you live in an area at high risk.
In addition to insurance, you'll need to consider the cost of storing your gold. Storage costs will not be covered by insurance. Safekeeping costs can be as high as $25-40 per month at most banks.
You must first contact a qualified custodian before you open a gold IRA. A custodian maintains track of all your investments and ensures you are in compliance with federal regulations. Custodians aren't allowed to sell your assets. Instead, they must keep your assets for as long you request.
After you have decided on the type of IRA that best suits you, you will need to complete paperwork detailing your goals. Your plan should include information about the investments you want to make, such as stocks, bonds, mutual funds, or real estate. You should also specify how much you want to invest each month.
After filling out the forms, you'll need to send them to your chosen provider along with a check for a small deposit. The company will then review your application and mail you a letter of confirmation.
When opening a gold IRA, you should consider using a financial planner. Financial planners are experts at investing and can help you determine which type of IRA is best for you. They can help you find cheaper insurance options to lower your costs.
How does a gold IRA account work?
Individuals who want to invest with precious metals may use the Gold Ira accounts, which are tax-free.
Physical gold bullion coin can be purchased at any time. You don’t have to wait to begin investing in gold.
An IRA allows you to keep your gold forever. When you die, your gold assets won't be subjected to taxes.
Your heirs inherit your gold without paying capital gains taxes. And because your gold remains outside of the estate, you aren't required to include it in your final estate report.
You'll first have to set up an individual retirement account (IRA) to open a gold IRA. Once you've done that, you'll receive an IRA custody. This company acts like a middleman between the IRS and you.
Your gold IRA Custodian will manage the paperwork and submit all necessary forms to IRS. This includes filing annual reporting.
After you have created your gold IRA, the only thing you need to do is purchase gold bullion. Minimum deposit required is $1,000 A higher interest rate will be offered if you invest more.
When you withdraw your gold from your IRA, you'll pay taxes on it. You'll have to pay income taxes and a 10% penalty if you withdraw the entire amount.
However, if you only take out a small percentage, you may not have to pay taxes. There are exceptions. There are some exceptions. For instance, if you take out 30% or more from your total IRA assets, federal income taxes will apply plus a 20 percent penalty.
You shouldn't take out more then 50% of your total IRA assets annually. You could end up with severe financial consequences.
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- 7 U.S. Code SS7 – Designation of boards for trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
Online buying gold and silver is the best way to purchase it.
You must first understand the workings of gold before you can purchase it. It is a precious metal that is very similar to platinum. It's very rare and is used as money because of its durability and resistance to corrosion. It's difficult to use, so most people prefer purchasing jewelry made from it rather than actual bars.
Today, there are two types available in gold coins: one is legal tender and the other is bullion. Legal tender coins are minted for circulation in a country and usually include denominations like $1, $5, $10, etc.
Bullion coins are minted for investment purposes only, and their values increase over time due to inflation.
They can't be exchanged in currency exchange systems. A person can buy 100 grams of gold for $100. Every dollar spent on gold purchases, the buyer receives one gram of gold.
When you are looking to purchase gold, the next thing to know is where to get it. If you want to purchase gold directly from a dealer, then a few options are available. First off, you can go through your local coin shop. You might also consider going through a reputable online seller like eBay. You can also look into buying gold online from private sellers.
Individuals who sell gold at wholesale and retail prices are called private sellers. When selling gold through private sellers, you pay a commission fee of 10% to 15% per transaction. Private sellers will typically get you less than a coin shop, eBay or other online retailers. This option is often a great one for investors in gold, as it gives you greater control over the item's value.
You can also invest in gold physical. You can store physical gold much more easily than you can with paper certificates. However, it still needs to be safe. You need to make sure that your physical gold is safe by storing it in an impenetrable container like a vault or safety depositbox.
When buying gold on your own, you can visit a bank or a pawnshop. A bank can provide you with a loan to cover the amount you wish to invest in gold. Pawnshops are small establishments allowing customers to borrow money against items they bring. Banks tend to charge higher interest rates, while pawnshops are typically lower.
You can also ask for help to purchase gold. Selling gold is also easy. A company such as GoldMoney.com can help you set up a simple bank account and get paid immediately.
By: Jamie Redman
Title: Ethereum Inflation Rate Escalates Amidst Declining Onchain Activity; $35.31M Accrued in 17 Days
Sourced From: news.bitcoin.com/ethereum-inflation-rises-as-onchain-activity-declines-35-31m-added-in-17-days/
Published Date: Wed, 11 Oct 2023 16:30:24 +0000