Nicole is a professional journalist with 20 years of experience in writing and editing. Her expertise spans both the tech and financial industries. She has…
The maximum supply of a cryptocurrency coin or token controls its rate of supply inflation, which can influence its value over time. It differs from total circulating supply and total supply, so it’s important for users and investors to understand the difference.
Maximum supply is defined as the total number of cryptocurrency coins or tokens that will ever be mined, or created. It is the maximum number of units that can ever be in circulation, and once the maximum supply is reached, no new units will be mined or issued.
This can be coded into the protocol from the genesis (first) block on the blockchain, in which case it is only changed if the developers decide to do so in the future.
The concept is one of the key features of cryptocurrencies that sets them apart from traditional fiat currencies, as a country’s central bank can print more currency at any time.
Setting a consistent issuance rate and limiting the supply of a coin or token creates scarcity that can control inflation, supporting the value of a cryptocurrency and influencing its potential uses
Maximum supply differs from total supply, which refers to all coins or tokens that have already been issued, minus any that have been burned or destroyed to remove them from circulation.
Total supply and maximum supply both include coins and tokens that are locked and held in reserve, whereas circulating supply refers only to those that are in circulation on the public market.
Maximum supply is a fundamental concept in the cryptocurrency markets, influencing the value, scarcity, and economic dynamics of each coin or token.
Whether fixed or inflationary, the supply model of a cryptocurrency shapes its perception and potential use cases.
Understanding a cryptocurrency’s supply dynamics is key for investors, developers, and enthusiasts.
Techopedia’s editorial policy is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
Nicole is a professional journalist with 20 years of experience in writing and editing. Her expertise spans both the tech and financial industries. She has developed expertise in covering commodity, equity, and cryptocurrency markets, as well as the latest trends across the technology sector, from semiconductors to electric vehicles. She holds a degree in Journalism from City University, London. Having embraced the digital nomad lifestyle, she can usually be found on the beach brushing sand out of her keyboard in between snorkeling trips.
What is Merged Mining? Merged mining, sometimes called combined mining, refers to the process of mining multiple proof-of-work (PoW) cryptocurrencies...
Eric Huffman Editor
What is Farcaster? Farcaster is an Optimism-based protocol for building decentralized social networking applications. As of 5 February 2024, Farcaster...
Mensholong LepchaCrypto & Blockchain Writer
What is a Secure Asset Fund for Users (SAFU)? The Secure Asset Fund for Users is an insurance fund for...
Trending NewsLatest GuidesReviewsTerm of the Day