What does inflationary mean in crypto?

Cryptocurrencies exhibit inflationary tendencies when their supply undergoes a steady expansion over time. This process can be attributed to various mechanisms employed within the system.

One such method of increasing the supply of a cryptocurrency is through mining. Mining involves solving complex computational puzzles to verify transactions and secure the blockchain network. As a reward for their efforts, miners are granted new tokens, thereby augmenting the overall supply.

It's important to note that not all cryptocurrencies exhibit inflationary tendencies. Some cryptocurrencies have a fixed supply or employ other mechanisms to control the rate of token issuance, thereby mitigating the effects of inflation.

Another approach to enhancing the supply of a cryptocurrency is through staking rewards. Staking involves locking up a certain amount of tokens to support the network's operations and security. In return, stakers receive additional tokens as incentives, contributing to the expansion of the overall supply.

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