What does Total Supply mean In Cryptocurrency?

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Wondering what Total Supply mean? then “What does Total Supply mean In Cryptocurrency?” is for you.

Total supply refers to the number of coins or tokens that currently exists and are either in circulation or locked somehow. It is the sum of coins that were already mined (or issued) minus the total of coins that were burned or destroyed.

Therefore, the total supply includes both the circulating supply and the coins that are yet to hit the open market. For instance, coins that are being held under a lockup or vesting period, which typically follows a private sale or Initial Coin Offering (ICO) event.

Coins or tokens that are eventually burned are excluded from the total supply. This means that when Binance performs its quarterly coin burn events, the total supply of BNB is reduced forever.

Total Supply vs. Circulating Supply

In contrast to the total supply, the circulating supply refers to all coins that are already circulating and available for trading in the various cryptocurrency markets. The circulating supply refers to the coins that are already in the hands of the public and, as such, does not include coins or tokens that are locked up or being held in reserve.

Since the market prices of a cryptocurrency coin cannot be directly affected by the part of the supply that is locked or reserved, the calculation of market capitalization normally considers only the circulating supply instead of the total supply.

Total Supply vs. Max Supply

While the total supply includes all coins that were already mined (or issued) minus the ones that were burned, the max supply refers to all coins that will ever come into existence. Unlike the total supply, the max supply includes the coins that are yet to be mined (in the future), along with the ones that are part of the total supply and also the ones that were burned.

From a cryptoeconomics point of view, many coins are valuable due to their inherent scarcity. For example, Bitcoin and other mineable coins are generated every time a new block is validated by a miner (and confirmed by the rest of the network). However, the generation of new coins is not an infinite process as most of the mineable cryptocurrencies have a cap (max supply) that limits the number of coins that can be generated. The max supply is usually defined at the moment the genesis block is created.

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