August 7th saw the beginning of what was set to become a week-long debate between the Bitcoin and Ethereum communities about Ethereum’s total supply and monetary policy.

What Happened?

Popular Bitcoin personality Michael Goldstein and Bitcoin researcher Pierre Rochard started questioning whether it was possible to independently verify the monetary supply of ETH.

In response to Rochard’s and Goldstein’s question, some Ethereum enthusiasts pointed them towards Etherscan, a popular explorer for the Ethereum blockchain - a dissatisfying response which led Rochard to personally put up a bounty of one million satoshis (around $114 USD at the time of writing) for the development of a script to verify the total ETH supply.

Enter the Ethereum Supply Scripts

MakerDAO developer Marc-André Dumas was the first to submit a script in response to Rochard’s bidding. 

The problem: Dumas’ script computed a number approximately 340,000 ETH higher than that displayed on CoinMarketCap, the source Ethereum co-creator Vitalik Buterin used as a reference for the total ETH supply two hours later.

Rochard posted yet another bounty:

“We now have one script. Can we get a second script? There's a 1 million satoshi bounty on it. And then we can work on reconciling differences. Maybe we can get to an exact current total ETH supply. Or maybe it's impossible.”

Over the next 48 hours, various developers worked on additional scripts - none of which delivered a definitive answer to Ethereum’s supply question.

When questions were raised from the Bitcoin community as to why such a script had not been developed earlier, Buterin responded Ethereum users “roughly” know the supply “according to the protocol rules,” adding that he believed with “so many people running different implementations [...] a bug would get caught”.

So, How Many ETH Are There?

It’s still unknown. “Leon, the fact checker” found that ETH supply varied across the board between different block explorers and the scripts. 

The Debate Between Samson Mow and Vitalik Buterin

Eventually, the conversations about the supply script of Ethereum led to a debate between Blockstream Chief Strategy Officer Samson Mow and Vitalik Buterin. 

Buterin stated the absence of a supply cap could actually help secure a blockchain network’s supply, arguing that if a blockchain network’s supply is fixed, there could be a lack of incentives for network participants.

Mow then quoted Satoshi Nakamoto, who previously wrote that transaction fees could adequately incentivize network participants:

The incentive can also be funded with transaction fees. If the output value of a transaction is less than its input value, the difference is a transaction fee that is added to the incentive value of the block containing the transaction. Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.

As the debate continued with no end in sight, podcaster Peter McCormack proposed to host the debate between Mow and Buterin on his platform, a suggestion both eventually agreed to.

What Happens Next?

The extended discussion about the circulating supply on the Ethereum network highlighted the differing philosophies, monetary policies, and fundamentals between Bitcoin and Ethereum. 

A key pillar of Bitcoin’s design is its fixed supply: there can never be more than 21 million bitcoins. Meanwhile, Ethereum implements an expanding supply policy to incentivize users.

The reactions of both Bitcoin and Ethereum enthusiasts toward the discussion varied. Some Ethereum enthusiasts voiced that the total supply does not “really matter.” Others said new scripts can verify the total supply of ether and as such, it is not a major issue.

Ethereum users believe that since the demand for ether is high due to surging gas costs, the supply of ETH can be expansive.

From Bitcoiners’ perspectives, the supply question is simple: supply should be fixed and easily verifiable. According to Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation, “the reason why Bitcoin is a world-changing invention, and not just ‘interesting tech,’ is the supply cap.”

But quant trader Qiao Wang pointed out that Ethereum’s monetary policy may still be too complex for the mainstream. Wang wrote:

“There’s a renewed debate over the monetary policy of BTC vs ETH. I’m not interested in the academic discussion, but I know the mass psychology. If you can’t explain your [monetary policy] in a few simple words, the herd will not buy your story. BTC is ‘21 million’. What’s ETH?”

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