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The Thirdening: What You Need To Know

The Thirdening: What You Need To Know Block rewards will reduce from 3 ETH to 2 ETH after the Constantinople hard fork on January 16th. Here’s what’s happening and what it means.

Jan 10

A Brief Overview

On December 6th, 2018, the Ethereum core dev team decided to move forward with the Constantinople hard fork. The update will be implemented at the 7,080,000 block, which is estimated to occur on January 16th, 2019. You can read about Constantinople here.

Constantinople will implement five Ethereum Improvement Proposals (EIP). One of those proposals is EIP 1234, which includes an adjustment to block rewards. Currently, when a block is successfully mined on the Ethereum blockchain, the miner receives 3 ETH as a reward. After Constantinople, miners will receive 2 ETH per block as a reward. This reduction from 3 ETH to 2 ETH is a reward adjustment of -33%, hence the “Thirdening.”

This is not the first time rewards have been adjusted for Ethereum. In late 2017, the Byzantium hard fork adjusted block rewards from 5 ETH to 3 ETH. The Bitcoin blockchain uses a similar strategy, reducing the block rewards by half every 210,000 blocks towards its eventual supply limit of 21 million Bitcoin. Unlike Bitcoin, Ethereum does not have an established limit of the number of ether in circulation. Overall, however, the reductions in block rewards are in an effort to reduce inflation by reducing the newly-available supply of ETH.

The Economics of Block Rewards*

Given average data from etherscan over the past year, the current supply of ether increases by 20,300 ETH/day. To break this down:

5,900 reg blocks * 3 ETH/block = 17,700 new ETH/day from reg. blocks1,090 uncle blocks * 2.42 ETH/block = 2,600 new ETH/day from uncles 17,700 + 2,600 = 20,300 total new ETH/day in rewards20,300 * 365 = 7,400,000 total new ETH/year in rewards

When rewards reduce to 2 ETH/block, there will be 33% fewer ETH rewarded for each regular block mined (avera...

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