Steemit Crypto Academy Contest / S6W3 - Tokenomics in the Crypto Ecosystem.
(Image Source: Peakpok App miner Screenshot)
****INTRODUCTION****
Good afternoon fellow students of Steemit Crypto Academy my name is Stephen Onokpasa from Nigeria. I'm a cryptocurrency enthusiast and I have been active in the cryptocurrency ecosystem since the year 2016. I'm here today to present my assignment on the topic "Tokenomics" and what it means to the blockchain community.
Tokenomics can simply be said to be the sum total of any given cryptocurrency and it's distribution with regards to circulating supply, total supply, maximum supply and burned supply. To expansiate further I'll be giving explanations on the meaning of the above stated tokenomics terminologies and their importance to the particular cryptocurrency ecosystem.
MAXIMUM SUPPLY
Maximum supply is the sum total of units of a given cryptocurrency that will ever be in existence. It is an important factor in determining the prospective value of a type of cryptocurrency in the overall cryptocurrency ecosystem. The larger the maximum supply the less scarce would be the cryptocurrency in regards to circulating supply and total supply and consequentially a low price value is likely to be established for such a cryptocurrency because supply is likely to over come demand. The reverse is often the case with cryptocurrencies with low maximum supply. For instance Bitcoin has a maximum supply of 21million as compared to the above captioned cryptocurrency "Peakpok" whose maximum supply is 200billion hence the more scarce Bitcoin is bound to attract a higher price value than Peakpok.
Maximum supply is the threshold beyond which no more units of the particular cryptocurrency can ever be in existence.
TOTAL SUPPLY
The total supply is the existing current maximum supply of a particular cryptocurrency beyond which there could exist exceeding units culminating in the maximum supply. Certain types of cryptocurrencies have no fixed maximum supply so a total supply which might be increased or reduced by token burn subsist.
CIRCULATING SUPPLY
This is the amount of cryptocurrency in circulation moving on the blockchain P2P transactions. Beyond this exist maximum or total supply of unmined/unminted cryptocurrency units. The circulating supply is a very important factor of Tokenomics and a good determinant of prospective price value of the said cryptocurrency due to the factor of supply and demand. The larger the circulating supply the likely less price value it'll attain and vice versa.
BURNED SUPPLY
The burned supply constitutes the total units of the cryptocurrency removed from the circulating supply to create scarcity and consequential greater demand over supply for a good price value. This is usually done by periodically sending units of the cryptocurrency to a dead wallet address from where the tokens can never be retrieved.
Below is a screenshot picture depicting the tokenomics of Bitcoin on coinmarketcap for further ilustration on the topic Tokenomics.
It shows the distribution of Bitcoin with regards to circulating supply, total supply and maximum supply.
CONCLUSION
With this I come to the end of my assignment and I do which you find useful information in my input. Thanks for your time reading and have a great day.