In Bitcoin, the total supply is capped at 21 million BTC. Is the total supply of Ether capped? How much will be mined before the Proof of Stake (POS) transition, and how will POS affect the issuance model?
[Ethereum] the total supply of Ether
economicsetherminingproof-of-stakeproof-of-work
Related Solutions
If you refer to something like Demurrage in Freicoin, then the answer is probably no - there was no special design to discourage hoarding of Ether. Also, the argument that such deterrent is required is related to the argument about wether Ether should be considered money or rather capital stock, or something else.
Additional info on Demurrage: It is understood as an artificial 'tax' on holding a currency, similar to the cost of storing and guarding any commodity. In the world of paper money, demurrage could be implemented as stamps, that had to be purchased and regularly affixed on a note of currency for it to continue to be valid. In the world of cryptocurrencies, demurrage can be implemented, for example, as an automatic reduction of amounts of currency held by accounts. It has been shown that demurrage does indeed increase velocity of money and could stimulate economic activity (in a similar way as inflation, but in more predictable manner).
Technical limitations
There are a few things that act together to prevent all ethers from being tied up in staking, or at least make it economically unattractive. The source for the info comes from here and here. However, I am adding my own interpretation and drawing additional inferences.
- There is a minimum amount of ether required to stake (1250 ether), which increases with number of validators. This provides the first hurdle: people with relatively few ethers are unable to stake unless they pool their resources. Some users may not wish to do this, since it involves trusting another party.
- Ether is locked up during staking. This means that, even if everyone were to trust "pool staking", at least in the proposed hybrid-staking period, newly mined ethers would be unable to be used for staking. (I'm assuming the lock prevents adding ethers as well as removing them, but I'm not sure; this does not affect the other points in this answer, though).
- There is a maximum of 250 validators. Thus, for people with lesser amounts of ether, they cannot "go solo" with staking. If we assume all validators are acting rationally, then it is in their own interests to prevent others from also performing validation by pooling with them. Why? As I'm sure you've figured out, if there is monetary inflation of, say, 5% and everyone's balance is growing by 5%, they're no better off than they were before, thus defeating staking as an economic incentive to secure the blockchain. However, this does not prevent the actual securing of the blockchain.
- There is a penalty for remaining a validator for a prolonged period of time. Sure, you can move your ethers around to a new account to become a "new" validator, but the 250 validator limit may prevent you from joining the set of validators until there is more churn.
Economic notes
As pointed out by @Distic, there are two kinds of inflation: monetary inflation (more money being printed) and price inflation (the nominal price of things going up). One can have one without the other, but hoarding can be an issue even with monetary inflation. If the usage of Ethereum as a value store keeps increasing, the price per ether (denominated in a "stable" fiat) will increase to enable the flow. This can lead to price deflation, denominated in ether. Conversely, if the use of Ethereum as a value store drops, even if no new ethers were being produced (no monetary inflation), one would expect to see price inflation, denominated in ether.
The hoarding issue can happen whenever people expect to see price deflation (i.e., whenever they expect the amount of goods/services the unit of account can purchase increases). We even see this with products: just before a new iPhone is expected to be released, I'm guessing Apple sees a drop in sales (unrelated to other companies' sales eating into Apple's). They hold onto their dollars because they think that the same amount of money will soon buy something of higher value.
Best Answer
From reddit post
Some discussions
inflation
After a while, 15,626,576 ether won't represent much of the total ether available, making the system dis-inflationary (i.e., inflation perpetually trending towards 0 but never reaching it).