What is Max Supply in Crypto and Blockchain?
The maximum supply refers to the total number of available units of a particular product or asset. Notably, it is a common term in cryptocurrency circles. This fact is because they have a decentralized issuance model.
What Is Max Supply In Crypto?
In the context of cryptocurrency, the maximum supply is the number of coins or tokens that will ever exist. Taking Bitcoin as an example, only 21 million BTC will ever exist. Some are in circulation, with a minority yet to be mined. Once the max supply is in circulation, there will be no more Bitcoins to mine.
What Is The Maximum Supply Of Ethereum?
Ethereum differs from Bitcoin in many ways. Its maximum supply is not a predefined number like in Bitcoin. Instead, the maximum supply of Ethereum has an annual maximum supply of 18 million. Its supply model decreases with inflation, ensuring that there is enough ETH to act as a medium of exchange and not too much to dilute its value.
Which Cryptocurrency Has An Unlimited Supply?
Different cryptocurrencies have different total supplies. The likes of Bitcoin, Litecoin, ChainLink, and Cardano have a predefined total supply. Others like Ethereum have a supply that adjusts to inflation. Therefore the phrase unlimited supply cannot apply in the strict sense. Controlling unchecked currency printing was one of the fundamental aims of Bitcoin and continues to influence the supply models of most cryptocurrencies.
What Will Happen When The Bitcoin Supply Runs Out?
Well, Bitcoin’s supply is running out with regards to the addition of new coins to circulation. That said, the 21 million Bitcoins will continue to circulate. The massive Bitcoin mining industry will be limited to transaction fees. Even then, this activity may be lucrative because of Bitcoin’s appreciation in price over the years.
What Is The Difference Between Total Supply And Max Supply?
Maximum supply and total supply are closely related concepts within cryptocurrency. In contemporary usage, maximum supply refers to all coins that will ever be in existence. This amount includes coins yet to be minted and tokens burnt out of existence. On the other hand, total supply refers to the sum of circulating coins and coins locked up for staking or investment ends.
Is Supply Tied To The Value Of Cryptocurrency?
Not necessarily. Bitcoin has a relatively scarce supply and high prices. Ethereum has an inflation-dependent supply model but still retains decent prices. There are other cryptocurrencies with supply models at both ends of the spectrum with differing fortunes in price. Bitcoin is lightning in a bottle. For other coins, supply only has a secondary influence on prices. Primarily, the coin or token’s usage and utility and its overall relevance in the industry have the most effect.
Who Controls Cryptocurrency Supply?
Most cryptocurrencies implement a decentralized supply model for the issuance of tokens or coins. Some rely on the efforts of miners and stakers, while others have varying automated protocol structures for token minting. The essence of decentralized supply is to prevent wanton printing that causes hyperinflation in fiat currencies.
