With the gradual recovery of the market, many newcomers have entered the market. Before the heroes explained some basic terms on the K line, today the heroes explain the nouns on the fundamentals of tokens. Let's start with Token's issuance rules. There are two basic nouns, total issuance and liquidity.
Total issuance or total supply:
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In the world of encrypted tokens, each token has its own supply rules, such as Bitcoin, whose total issuance is 21 million, and it will never be issued. This token is called a deflation token. In addition, there are statistics showing that there are about 5 million BTCs in the world that have never been moved in the past seven or eight years. Therefore, it is simple to think that 5 million BTCs in the world are in a 'lost' state. Most of these BTCs are because early players forget the private key. , or for some reason has not moved. This is one of the reasons why BTC prices can rise further.
However, tokens such as ETH and EOS do not have a limit on the total amount, and are issued in a certain proportion each year. This token is called an inflation token. Another point to note is that many tokens have their own destruction mechanism. For example, most platform tokens have a scheme for repurchase and destruction. Destruction generally sends the number of tokens that need to be destroyed to a destroy address. This address does not belong to Anyone is an irreversible act, so the destroyed token will not be counted in the total amount, and the disguised one adds a single token value.
Now the market value of the token is calculated by multiplying its liquidity by the unit price. In simple terms, it is the amount of tokens that participate in circulation in the market. The tokens that are locked for a long time are not included in the liquidity, or similar to BTC. The parts of the token of this POW mechanism that have not been dug up are not included in the liquidity. The total amount of BTC is 21 million, but the total number of BTCs dug out is 17.72 million, and its circulation is 17.72 million.
At the same time, this is also the reason why the top 10 tokens of the market value are so different, such as LTC and EOS, their market capitalization ranks are 5th and 6th respectively, while the LTC unit price is 700 yuan, and the EOS unit price is 42 yuan. Because their total circulation varies greatly, LTC's liquidity is 61.93 million and the total amount is fixed. EOS's liquidity is 944 million and the total amount is not fixed. If the unit price of EOS reaches 700 yuan, it means His market value will reach more than 600 billion, to know that the market value of Ethereum is only more than 180 billion, but in the last crazy bull market, the price of Ethereum reached over $1400, and the market value reached more than 1 trillion. Therefore, we can still expect the price of the grapefruit in the future bull market.
As the BCH with the same total amount of BTC, the current unit price is only 400 US dollars. You can also imagine how much BCH can reach when the BTC reaches 100,000 US dollars in the future. (Abit Financial)