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Unlocking of cryptocurrency secrets: understanding of key metrics
The cryptocurrency market has experienced a meteoric increase in recent years, and prices fluctuate greatly depending on the feeling of the market and the trust of investors. To navigate this complex panorama and make informed investment decisions, it is essential to understand the key metrics that determine the value and potential of cryptocurrencies.
In this article, we will deepen the following topics:
- Total supply : Understand the concept of total supply in cryptocurrency
- Gas : Draw the role of gas in cryptocurrency transactions
- TVL (Total Blocked Value) : How to calculate the total locked value and its implications
1. Total supply
Total supply refers to the maximum number of currencies that can be created or coined through a particular process, such as mining or commitment. In most cryptocurrencies, this is determined by a consensus algorithm, which governs how new coins are assigned.
For example, Bitcoin’s total supply has a limit of 21 million, while Ethereum’s supply has a limit of 126 million (although there have been proposals to increase this limit). This limited supply creates shortage and increases the value of each currency over time.
2. Gas
Gas refers to the computational power required to validate transactions in a blockchain network. It is measured in units called “gas units” or “GWEI”. The amount of gas required for a transaction depends on its complexity, the number of inputs involved (such as transactions) and the consensus algorithm used by the network.
The main types of gas are:
* Gas : required to execute a single operation (for example, create a new block)
* GAS PRICE (GWEI) : The rate charged for each gas unit (the higher, more expensive)
High gas costs can lead to greater transaction times and rates. To mitigate this, some cryptocurrencies have implemented several mechanisms to reduce gas expenses, such as bet or stake test algorithms.
3. TVL (Total Blocked Value)
TVL refers to the total amount of cryptocurrencies blocked in wallets that are not actively marketed or transferred outside the network. This metric is crucial because it indicates the level of liquidity and stability within a particular ecosystem.
The TVL concept has gained significant attention in recent years, particularly among institutional investors who seek to diversify their portfolios with stable chain assets. TVL can be divided into two main components:
*Z
* Unlocked value
: The total value blocked outside the network (for example, treasury tokens)
A high TVL indicates a strong and liquid ecosystem with a minimum risk of loss of assets or market volatility.
Conclusion
Understanding key metrics such as total supply, gas and TVL is essential for anyone who wants to navigate the complex world of cryptocurrency. By understanding these concepts, it will be better equipped to make informed investment decisions and stay ahead of the curve in this space in rapid evolution.
As the panorama of cryptocurrencies continues to evolve, new metrics and indexes are likely to provide a more complete image of the market performance. Stay vigilant and always learn: The world of cryptography is vast and fascinating!