The supply of many coins continues to grow, and if demand lags behind supply, their prices go down. Mining, although it is not going through the easiest period, has not stopped. Initially, the offer was limited to 100 billion coins, but in 2014 the developers canceled it.Īt the moment, most cryptocurrencies can be considered inflationary, since many of them either do not have emission restrictions or have not yet reached the stated limit. A typical inflationary cryptocurrency is Dogecoin, millions of DOGE mined in the mining process appear in circulation every day. Inflationary coins include coins and tokens with unlimited emission. In the world of cryptocurrencies, inflation and deflation have more to do with the supply of a particular coin than with its purchasing power. It may sound nice, but it is not always good for the country’s economy. ![]() Accordingly, deflation is called directly opposite processes, when the cost of living decreases and the purchasing power of the currency grows. ![]() In the real world, this is happening as a result of the ever-increasing cost of living. Inflation is a decrease in the purchasing power of a currency or other asset. The supply limit changes extremely rarely and such changes noticeably change the behavior of the asset in the market. For Bitcoin, it is only 21 million coins, while Ethereum can be minted indefinitely. Of course, this feature was built in from the beginning. The main criterion for determining whether a currency belongs to one of these groups is the supply limit, the number of coins that can ever be put into circulation. In addition, each asset is characterized as inflationary or deflationary. The belonging of an asset to one or another type to some extent characterizes the peculiarities of its behavior in the market and helps to navigate when choosing a coin for investment. At a purely user level, these differences do not affect the ability to swap XMR to BTC or any other crypto pair. Among cryptocurrencies, there are coins, tokens, stablecoins, tokenized assets. Digital currencies can be classified according to different criteria.
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