Issuance

Issuance in the world of cryptocurrency is all about how new coins or tokens are created and distributed. It’s a fundamental aspect of any blockchain system because it controls how and when new digital assets enter the market. In systems like Bitcoin, issuance happens through mining, where miners are rewarded with new coins for validating transactions and adding them to the blockchain. This process is carefully regulated by the blockchain’s protocol to ensure that the supply of new coins is controlled and predictable, which helps maintain the value of the currency.

But issuance isn’t just about mining. In proof-of-stake (PoS) systems, for example, issuance works differently. Instead of mining, new tokens are distributed to validators who have staked or locked up some of their existing tokens as collateral. This approach is designed to be more energy-efficient and can help secure the network in a different way. The key is that issuance, whether through mining, staking, or another method, needs to be well-designed to ensure the stability and security of the cryptocurrency.