Cryptocurrency with limited issuance

Any digital currency is based on blockchain technology. The main attribute of a distributed ledger is decentralization. This is what makes virtual money convenient and safe to use. National banks have no influence on cryptocurrency rates, and government agencies have no control over the movement of cryptocurrencies. The blockchain itself has rules that determine how coins are mined (mining), how many of them are mined and how fast the blocks are generated (in the Bitcoin network, a new element appears every ten minutes). When a limited cryptocurrency is mentioned, it means that the number of issued or planned coins is limited. This too is embedded in the blockchain code, and the rule can only be changed by a majority vote of the owners of full network nodes.

The concept of emission

The term itself is not new and refers to the issuance of banknotes into circulation. Each state regulates the issue of national fiat currency. The amount of money in circulation determines its exchange rate and the rate of inflation.

In the case of cryptocurrency, the situation is different. The release of coins does not depend on external factors and takes place in the order determined by the developers.

There are three types of digital currency issuance:

• Limited one-time release. All cryptocurrency is issued at once and in full. There is no further input of coins. This approach protects assets from inflation, and therefore they can be a good tool for long-term investments. Representatives – NEM (XEM – 9 billion).
• Limited Controlled. Tokens are put into circulation gradually, through mining (if PoW protocol is adopted) or stacking (PoS consensus). But their total number is limited. For example, Bitcoin (BTC – 21 million), LightCoin (LTC – 84 million).
• Unlimited controlled. The issue has no upper limit and is only regulated by mining conditions. This solution can be dangerous because of the possibility of inflation. The rate of these assets is hard to predict, and they are rarely used for long-term storage (although there are exceptions). Ethereum, Dogecoin and Solana are among the representatives.

List of restricted cryptocurrencies

For investors, such digital assets are more convenient. If the project turned out to be needed right away and was well accepted in the cryptocommunity, it is possible to assume that the price will only increase, and even predict changes in the rate.

To give you an example. Yearn.finance (YFI) – only 36,666 tokens were entered.

This created a shortage, and since the launch (July 2020) the price has increased 45 times in 2 months.

Title	Type of issue	In circulation as of December 2021	Maximum number of
Bitcoin (BTC)	Limited Controlled	18 million	21 million
Binance (BNB)	One-time	166 million	166 million (down from 200 million as a result of regular withdrawal of coins from circulation)
Cardano (ADA)	Limited Controlled	33 billion	45 billion
Chainlink (LINK)	One-time	467 million	1 billion
Axie Infinity (AXS)	One-time (some coins are frozen)	61 million	270 million
IOTA (MIOTA)	One-time	2.7 billion	2.7 billion
42-coin (42)	Limited controlled, already completed	42	42

Prospective coins

Bitcoin (BTC)

The first cryptocurrency tops all popularity rankings. Bitcoin has the largest capitalization, daily turnover and market dominance indicator (39.74%). In favor of the reliability of this asset is the fact that the Chicago Mercantile Exchange began trading futures contracts on Bitcoin.

Cardano (ADA)

Cardano is a very interesting blockchain project. As of December 9, 2021, the coin ranks 6th by market capitalization (data from CoinMarketCap website). According to analysts, after smart contracts technology was launched on the Cardano blockchain, DeFi projects will come to the system. This could be the impetus for further growth of the exchange rate.

Chainlink (LINK)

For smart contracts to work fully, they need to communicate with the outside world, and the information coming from the outside must be understandable for the blockchain to process. This is a niche that the Chainlink project, which offers its own decentralized network of oracles, is trying to fill. It has almost no competitors in this area, and its partners include very large and well-known companies: Google, Swift, Intel, Signal Capital, IC3 and others. In December 2021, LINK ranks 21st in terms of capitalization.

Stellar (XLM)

A platform for financial transactions between various digital assets and fiat money. The project also owns the StellarX exchange – a “gateway for fiat”, where you can deposit dollars directly from your bank account. The platform’s internal coin is Lumen (XLM). It is intended for payment of transaction fees for investments in the project. In the CoinMarketCap rating it ranks 25th (as of December 9, 2021).

Polygon (MATIC)

The Polygon platform is an add-on to the Ethereum blockchain and was developed to solve problems with network scalability. The result is an ecosystem that is compatible with the distributed registry of Ethereum. It outperforms the base model in many respects. For example, transaction speeds in August 2021 were 65,000 TPS, with the ability to scale up to 1 million transfers per second. Such characteristics led people to consider Polygon as an alternative to Ethereum, which immediately affected the MATIC token exchange rate. From January 1, 2021 to May 18, its price rose 122 times (from $0.02 to $2.45).

Algorand (ALGO)

Another cryptocurrency with limited issuance. The main principles guiding the developers were: high transaction speed, scalability, security, and low price for transfer processing (commission). Thanks to the new consensus protocol (pure proof of ownership or PPoS), it is possible to create DeFi protocols and run decentralized applications (dApps), which will handle large amounts of data (we are talking about hundreds of millions of users). In favor of the ALGO Coin as an investment tool are the following facts:

• In March 2020, it was decided that the national digital currency of the Republic of the Marshall Islands will be developed on the Algorand blockchain.
• The digital vaccination passports introduced in Colombia are based on Algorand’s distributed registry technology.

Is it worth investing in a limited-edition digital currency

Probably, one should not choose an instrument for investment based on only one parameter, especially using cryptocurrency. There are not many factors that affect the prospects of a digital asset, and you need to carefully work through them all. Although if you take equal conditions (the approximate amount of capitalization, coin turnover per exchange session, the reputation of the project founders), it is better to give preference to cryptocurrency with a limited number of coins. It is less subject to inflation.