Vitalik's Serious Joke: The Case for Ending Ethereum Inflation

He believes limiting the market supply to exactly that figure, twice the number of ether sold in the platform's 2014 ethereum fundraising, could help long term.

"Ether has a primary intrinsic purpose on the ethereum protocol, that is, to be consumed as a resource with which to run calculations upon a computational machine," an independent ethereum developer, Darryl Morris, wrote in a blog post.

Because such a limit would, theoretically, cause the value of ether to rise, transactions that burn small amounts of ether would be disincentivized.

In the developer meeting last week, Buterin stressed that transaction fees are not proportional to the price of ether, but rather reflect demand for the ethereum platform.

While the inflation rate on ethereum is currently quite low, Buterin contended that even small rates of inflation are a "Huge deal" in the context of financial market returns.

With an unlimited supply, Buterin warned that ether could even be surpassed in market capitalization by one of the ERC-20 tokens that have been launched on top of ethereum.

As tokens can be programmed without inflation, Buterin explained, "Basically every ERC-20 token becomes a better store of value than ETH.".

On the topic of miner payouts, Buterin argued at the meeting that rather than miners being paid with newly-created ether, miners could, in the future, be paid directly by transaction fees.

According to Buterin, that change would be simple to implement, since all the remaining ether could be locked into a smart contract, and dished out to miners via fees over time.

While rewards would decrease as the total ETH supply converges toward its limit - potentially disincentivizing miners - Buterin said that inflation poses a similar risk.