Circulating Supply Vs. Total Supply: Key Differences
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important difference between circulating supply and overall supply: cryptocurrency landscape unpacking
In a completely changing cryptocurrency world, the main differences between two main metrics can be game converter both investors, traders and enthusiasts. The point is very important to understand how the circulation supply and overall supply are calculated as they play a crucial role in the formation of cryptocurrency value and dynamics.
What is a circulation supply?
Circulation supply means the total number of coins or tokens that can be used for consumers, traders and investors. This reflects the amount of digital assets that can be exchanged, purchased, sold or sold without removing from circulation. In other words, this is the amount of cryptocurrency in the flow.
To calculate the circulation supply, you need to know both:
- Total supply (maximum possible number of coins)
- Current circulation supply (total quantity currently available)
What is a complete supply?
The total supply is the absolute maximum possible number of coins or tokens that cryptocurrency can be stored at any time. This is the final limit of certain cryptocurrencies that cannot be exceeded.
To calculate the overall supply, you need to know both:
- Maximum possible total supply (maximum possible number)
- Current circulation supply (currently available quantity)
Main differences:
Although it may seem uncomplicated, the understanding that the difference between circulating supply and overall supply can have a major impact on your investment solutions.
Here are the main differences:
* Restrictions:
Circulating supply is limited by market conditions, regulatory requirements or even technical restrictions. On the other hand, the overall supply reflects the absolute limit that cannot be exceeded.
* Inflationary pressure: Circulating supply increases due to new coin discharges or increased demand, the total supply remains constant. On the contrary, the total supply may be reduced if new coins are reduced, which will be minted or removed from circulation.
* Market volatility: Circulating supply can fluctuate quickly due to market conditions and changes in investors’ attitudes. However, the overall supply is more stable because it is an absolute limit that cannot be changed.
Real world examples:
To show the difference between circulating supply and general supply, let’s consider some examples:
* Bitcoin: The maximum possible Bitcoin number (22 million) is higher than the current circulation (about 18.9 million). This means that there is still room for growth because more coins are mined or removed.
* Ethereum: While the total supply (approximately 137 billion) exceeds the current circulating supply (about 70.7 billion), it should be noted that the overall supply is not limited in market conditions, while the circulation supply may change quickly.
Conclusion:
Understanding the difference between circulating supply and overall supply is very important in making reasonable decisions in the world of cryptocurrency. Realizing these basic concepts, you will be better prepared to browse the ever -changing landscape and choose intellectual investment.
Whether you are an experienced investor or just starting, it is necessary to constantly update the latest changes in this rapidly developing area. Observe market trends, changes in regulation and technological progress to increase your return and reduce risk.
Additional sources:
For more insights on cryptocurrency markets and their dynamics, consider exploring reliable sources such as:
- Coindesk
- Coindesk
- Cryptoslate
- Block
Once you have been informed and renovated the latest changes in the cryptocurrency world, you will be better prepared to browse this complex landscape.
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