The vital difference between circulating supply and total supply: unimaltying the cryptographic landscape
In the world in continuous evolution of cryptocurrency, understanding the fundamental differences between two key metrics can be a turning point for investors, traders and enthusiasts. At the base, it is essential to understand how the circulating offer and the total offer are calculated, since they play a crucial role in modeling the value and dynamics of cryptocurrencies.
What is the power supply circulating?
The circulating offer refers to the total number of coins or tokens that are available for use by users, traders and investors. It represents the amount of digital activities that can be exchanged, purchased, sold or exchanged without being removed from circulation. In other words, it is the amount of cryptocurrency in the flow.
To calculate the circulating diet, it is necessary to know both:
- Total supply (the maximum possible number of coins)
- Circulating current supplement (the total quantity currently available)
What is the total offer?
The total offer is the maximum absolute number possible of coins or tokens that a cryptocurrency can contain at any time. It represents the final limit of a certain cryptocurrency, which cannot be exceeded.
To calculate the total offer, it is necessary to know both:
- Maximum possible total supply (the largest possible number)
- Circulating current supply (the quantity currently available)
Key differences:
Although it may seem simple, understanding the difference between circulating supply and total supply can have a significant impact on investment decisions.
Here are the key differences:
* Limitations: The circulating offer is limited by market conditions, regulatory requirements or even technical constraints. The total offer, on the other hand, reflects an absolute limit that cannot be exceeded.
* Inflationary pressures: As the circulating supply increases due to the new emissions of coins or greater demand, the total supply remains constant. On the contrary, the total offer may decrease if there is a reduction of the new coins coined or withdrawn from circulation.
* Volatility of the market:
The circulating offer can flow rapidly due to market conditions and variations in the feeling of investors. The total offer, however, is more stable, as it represents an absolute limit that cannot be changed.
Examples of the real world:
To illustrate the difference between circulating supply and total supply, we consider some examples:
* Bitcoin: The maximum possible number of Bitcoin (22 million) is greater than the current circulating supply (about 18.9 million). This means that there is still room for growth since more coins are extracted or withdrawn.
* Ethereum: while the total offer (about 137 billion) exceeds the current circulating supply (about 70.7 billion), it is essential to note that the total offer is not limited by market conditions, while the Circulating offer can change quickly.
Conclusion:
Understanding the difference between circulating supply and total supply is crucial for making informed decisions in the world of cryptocurrency. By grabbing these key concepts, you will be better equipped to navigate the panorama in constant evolution and make intelligent investment choices.
Whether you are an expert investor or who has just started, it is essential to remain updated on the latest developments in this rapidly evolving field. Keep an eye on market tendencies, regulatory changes and technological progress to maximize returns and minimize risk.
Additional resources:
For further information on the cryptocurrency markets and their dynamics, consider exploring reliable sources such as:
- COINDESK
- COINDESK
- Cryptoslate
- The block
By remaining informed and updated on the latest developments in the world of cryptocurrency, you will be better equipped to navigate in this complex landscape.