it is important to understand Inflation and Deflation before getting into their meanings in crypto world. Inflation is a result of ever-increasing cost of living. Deflation, on the other hand, is the result of decreasing cost of living

In the crypto world, inflation and deflation relate to the supply of a given coin or token rather than its buying power

Supply limits play a key role in whether a crypto is inflationary or deflationary. A supply limit refers to the maximum amount of any given coin or token that can ever be put into circulation.

Inflationary cryptocurrencies are those with an ever-increasing circulation number. majority of the coins and tokens are inflationary. take Doge Coin for example. Initially, Dogecoin was designed to have a supply cap of 100 billion DOGE, but its developers scrapped this limit in 2014, and its supply currently stands at more than 132 billion DOGE

Deflationary cryptocurrencies are those with a fixed circulation number. these types of coins are more likely to see a spike in price, since the supply is fixed. BTC has a fixed supply of 21 million coins and it is the most popular deflationary coin out there.

Ethereum, whose ether was once a purely inflationary coin, in August 2021 implemented a mechanic called EIP-1559 that burns tokens instead of handing them to miners. At times of high network activity, burn rates have temporarily made the coin deflationary, meaning that more tokens are destroyed than created.

it is important to understand Inflation and Deflation before getting into their meanings in crypto world. Inflation is a result of ever-increasing cost of living. Deflation, on the other hand, is the result of decreasing cost of living

In the crypto world, inflation and deflation relate to the supply of a given coin or token rather than its buying power

Supply limits play a key role in whether a crypto is inflationary or deflationary. A supply limit refers to the maximum amount of any given coin or token that can ever be put into circulation.

Inflationary cryptocurrencies are those with an ever-increasing circulation number. majority of the coins and tokens are inflationary. take Doge Coin for example. Initially, Dogecoin was designed to have a supply cap of 100 billion DOGE, but its developers scrapped this limit in 2014, and its supply currently stands at more than 132 billion DOGE

Deflationary cryptocurrencies are those with a fixed circulation number. these types of coins are more likely to see a spike in price, since the supply is fixed. BTC has a fixed supply of 21 million coins and it is the most popular deflationary coin out there.

Ethereum, whose ether was once a purely inflationary coin, in August 2021 implemented a mechanic called EIP-1559 that burns tokens instead of handing them to miners. At times of high network activity, burn rates have temporarily made the coin deflationary, meaning that more tokens are destroyed than created.