Bitcoin Forum

Hello, which factors determine the total supply of an altcoin? Also the circulating supply?

The total supply is decided by the dev team if the ICO token are sold out. Since some dev choose to lock some coin for further usage, the circulating supply is less than total supply.

The amount of people that is willing to purchase the coin. I am pretty sure that all those numbers are random, the number is usually even as well.

My own understanding of  the factors that determine total supply of coins is the developers for capped coins that is those that have a maximun supply eg Bitcoin is 21 000 000 and for those that are not capped that depends on its adoption and use by people. The factor  for circulating supply  is the market price of the coin and its popularity.

Also, you should consider lost wallets, bounties, etc

Very simple! If the coin is mineable the mining is the sole factor that determined circulating supply of course mining algorithm, difficulties and reward come to play in supply also. On the other hand however, if a coin is pre-mined then whoever pre-mine the coin is in total and absolute control of both circulating supply and total coin!

Formally, these two concepts are designed to mitigate the market situation and reduce pressure on the price. In fact, all tokens / coins will sometime be in circulation and this will significantly increase capitalization. This is a good move for projects that do not set out to attract tens of millions of dollars of funding through ICO and receive funding through periodic sales of own tokens.

Total supply can be limited in advance by the dev team and it holds not only for icos but basically any currencies. The supply can also be infinite (like dogecoin) and potentially infinite (there are coin setting strict amounts of supply which can be generated over a certain time but to total supply). As for the circulating supply, this is the amount of coins which are already generated and are in use by the community. Again, it can be partially controlled by dev team limits, but mostly it is determined by miners/holders depending on a system. What's interesting, total supply can also be the circulating supply like in case of IOTA which has released all possible coins already.
Edit: I read just now that total supply is defined as the supply of coins that exist now and circulating as the amount of coins actually used. Now I'm a bit confused, because I saw people meaning max possible supply by the word 'total' as well..

Thank you all for the prompt answers. The reason I am asking is that having a look at the https://coinmarketcap.com site, then using the circulating supply and the market cap one can find the price of a coin. Thus, one can estimate the future price based on estimations about the market cap and the circulating supply. And since the market cap is something that depends on the market but circulating supply does not depend on the market, then those who control circulating supply have great power/influance on the future price of the coins. Am I right or I have misundersood something here?

Nope. Circulating supply is the number of coins that are currently in circulation.

The total supply is the amount of coins that can EVER be in circulation. For bitcoin, there is a cap at around 21 million that can be never exceeded. But bitcoin's circulating supply on the other hand is only less than 20 million right now.

Nobody "controls" the circulating supply.

You are right about Bitcoin. Nobody controls its circulating supply. But there are some coins that their circulating supply is controlled by developers ( Most of the Ethereum based tokens that we see nowadays )

There are no factors to be honest. The developers decides themselves the coin cap/total coin supply. This total coin supply and current circulation supply helps to determine the price of the coin.The less the supply and more the users, the higher the price will be. Look at doge coin. Has no coin supply and one doge is just less than few cemts

Makes me wonder how many bitcoins are gone forever due to wallet losses over the years.

Yes, but they are not really coins.

Tokens are obviously special in the sense that the developers can essentially have control over the circulating supply. Still though i don't think it's like that - ERC20 tokens can't be created out of thin air and there are still predetermined maximums.

So circulating supply is still kind of decentralized, if you know what i mean.

These are determined entirely by the code that the devs of the coin have set when they have released the coin. It dictates how many coins can be in circulation at maximum and how the coin release curve will look like.

With blockchain tech block rewards are usually used, each time someone mines a block they get a set amount of block rewards, increasing the circulating supply.

Think of total supply as the amount of coins that can be in circulation at max.

Yes they are determined by the developer's team and the founders of the project. If a project has more than 100 million of tokens in circulation and they want to raise a huge amount of money, then probably it is going to be a scammy project in some months.
Try to be aware of those projects who are not offering "burning service" to those tokens who haven't been sold during ico and pre-ico.
I dont like those projects who have billions or even hundreds of million coins in circulation.

No wallet is lost forever. Eventually computers will get so advanced that any today's wallet will be bruteforced, so also lost wallets. Only if there will be enough BTC to make it worth doing it.  Imagine this same as today's bounty hunters that search for lost Ships in oceans. Difference is that this BTC lost wallets hunters will exactly knew how much BTC is on the wallet. Today's old ships bounty hunters have no ideas except some clues from past.

The code - this is programmable money