Why do developers choose for a high or a low supply in coins?

[stienos0]

Hi people,

I'm now into cryptocurrencies for a while (trading and the technical background), but I'm having this question. Maybe you could help me out.

What are the technical implications of a coin having a high or low supply? From a trading perspective, I know that this has an effect on the volatility. However, from a more technical perspective: how does this effect the performance of the coin? Does this even affect the performance? And does this relate to the purpose of the coin?

Thanks!

[mautenisis]

Hi people,

I'm now into cryptocurrencies for a while (trading and the technical background), but I'm having this question. Maybe you could help me out.

What are the technical implications of a coin having a high or low supply? From a trading perspective, I know that this has an effect on the volatility. However, from a more technical perspective: how does this effect the performance of the coin? Does this even affect the performance? And does this relate to the purpose of the coin?

Thanks!

Low cap coins are more risky than investing highcap coins,lowcap coins are easily manipulated by these freedy whales in the market,less supply higher chance to have higher price and viceversa.

[stienos0]

Thanks for your reaction!

As you said, these coins have a higher risk. That is what I meant with high volatility.

Though, apart from trading, how does this work from a technical perspective? Why would a team work with a low supply of coins for example? As this has a higher risk in trading. And the other way around, why would a team work with a high supply of coins?

[mautenisis]

Thanks for your reaction!

As you said, these coins have a higher risk. That is what I meant with high volatility.

Though, apart from trading, how does this work from a technical perspective? Why would a team work with a low supply of coins for example? As this has a higher risk in trading. And the other way around, why would a team work with a high supply of coins?

Maybe they wanted to limit the supply for the higher price?i dont know why these coin doing this kind of thing.Lets wait for the other's reaction.

[gredisgold88]

Thanks for your reaction!

As you said, these coins have a higher risk. That is what I meant with high volatility.

Though, apart from trading, how does this work from a technical perspective? Why would a team work with a low supply of coins for example? As this has a higher risk in trading. And the other way around, why would a team work with a high supply of coins?

yes, when their need money to develop bussines , or invest coins to any devs . prespective technical for whats ? , if a good devs , they are to transparance about money and develop .

[BlackPanda]

Hi people,

I'm now into cryptocurrencies for a while (trading and the technical background), but I'm having this question. Maybe you could help me out.

What are the technical implications of a coin having a high or low supply? From a trading perspective, I know that this has an effect on the volatility. However, from a more technical perspective: how does this effect the performance of the coin? Does this even affect the performance? And does this relate to the purpose of the coin?

Thanks!

In my opinion there is no problem when supply a lot or a little. What distinguishes may be only the value of the coin. For me the most important is how the coin can be developed, because when the coin is well developed then the results will be good so as to give confidence to the market share coin. Without good development a coin will only slowly decline and then disappear forever.

[stienos0]

I totally agree with you. But in my opinion development should always be good in order for a coin to be adopted well. I don't think this has something to do with the total supply of coins.

For example: the total supply of Bitcoin is 21,000,000 BTC. 
Ripple has a total supply of 99,993,093,880 XRP.

Why does this differ so much?

[Nhebu]

Hi people,

I'm now into cryptocurrencies for a while (trading and the technical background), but I'm having this question. Maybe you could help me out.

What are the technical implications of a coin having a high or low supply? From a trading perspective, I know that this has an effect on the volatility. However, from a more technical perspective: how does this effect the performance of the coin? Does this even affect the performance? And does this relate to the purpose of the coin?

Thanks!

In my opinion there is no problem when supply a lot or a little. What distinguishes may be only the value of the coin. For me the most important is how the coin can be developed, because when the coin is well developed then the results will be good so as to give confidence to the market share coin. Without good development a coin will only slowly decline and then disappear forever.

There is effect of value in the supply of the coin. I think it is important for the traders and they always first look for the cap.
The development of the coin or the ICO Is important also to notice specially if there are developers who have well experienced in marketing and they are dedicated in the project or coin.

[kambaralikhan]

Supply has very significant influence of the performance of coin. Coins with huge supplies always dumped too much and on the other side, coin with the small supply always grow at the attractive rate because investor hold that coin and very rarely dumped. No dumped means very less chance of coin being fall in price at higher rate.

[stienos0]

So the decision of having a high supply or a low supply of coins is only dependent on the eventual price fluctuation?

[FiveReelsOne]

As what I have thought about it the supply of the coin sometimes will affect its performance mainly because for example when there is shortage in terms of supply and there is a great demand, user will tend to use other coins rther than the one they prefer. At times also I guess there is no problem when it comes to high or low supply. Whats more important is the feature of the coin or even its value. Innovative coins are more prefered than those much complicated ones.

[joselitobayagbag]

Supply really effects to what people's mindset,higher chance of success for them are the coins which supply is in average,quality of the coins starts in the developers do to that they need funds for their project.

[caeles]

The supply of the coin affects the price of the coin. The higher the supply of the coin and the lower the demand, the lower the price it will have but the lower the supply and higher the demand, the higher price it will have. If the coin has higher supply and higher demand, the price depends on the ratio of the supply and demand. The supply of the coin really affects the price of the coin so most of the companies that creates cryptocurrencies burn their unsold coins to have a lower supply and higher demand so the price will rise. I have experienced that situation so I have knowledge about this.

[shaheer001]

Actually the main thing is the Coin or token project which reflects the coin value and as they develop the coin project slowly the price and value goes up as the trust and interest by crypto investors increase.so it does not matter the original coin supply but if the project is well developed and coin supply is low then it will boost fast but large supply coin will also go up but take time like Ripple,Steller,Dogecoin,etc.

[stienos0]

Thanks for all the help, but I know how the relationship between market capitalization and coin supply works. As I said, my question is not regarding the effects of the coins supply on the price of the coin. I want to know why a development team chooses for a high supply of coins or a low supply of coins. Does this only relate to the price fluctuation or does it have to do something with the applicability of the coin?

[Smoothmazi]

The higher the supply the slower the price growth.

[qazgroup]

Just consider the basic economics of supply and demand to understand this, if the supply if low and the demand gets higher the price will easily grow multifold but if there is enormous supply that is more than the buyers the price will likely remain low unless the demand increases immensely.

[stienos0]

Thanks, but still not the answer I'm looking for. After the chosen amount of coins that make the total supply, the "basic economics of supply and demand" is just a consequence of it which affects the price. This still does not explain why developers initially choose for a high or low amount of total supply.

[inashed]

extremely high supply is good because, this means you will always have enought coins to be represent wealth disparity and to be used.

If you have only 1000000 (without decimal) and the market cap is 1 billion dollars, each coin is worth 100 dollars, if you want to spend less than that it become a problem, this hypothetical coin here is also a bad coin to represent wealth, some kids have less than 100 dollars, while some guys have more than 1 billion, this coin hypothetical coin can't represent this wealth disposition.

It will be usually said you can just increase the max supply later but it would require consensus, also if you add more coins distributed mining (instead of adding more decimal places, or multiplying everyone amount of coins by X) you will inflate the coin a thing not wanted by anyone with a brain.


Having a extremely high supply also means you can buy coins no matter how much the market cap is, you can always "enter the game".
There is also the fact its easier to sell coins, because you dont have to rely at a few rich guys buying your coins, you can have many not so rich guys buying it.