In an ICO when no mining takes place, it could be that the total supply of currency has already been created at the birth of the currency

Question

BlackTom AI · Accepted Answer

The statement asks about ICOs and the scenario where no mining takes place. In such cases, the total supply of the currency can indeed be pre-minted or created at the birth (genesis) of the currency.

First, consider what “total supply created at birth” means: at the time the token contract is deployed and initialized, the entire supply could be minted and assigned to founders, investors, or a treasury, rather than being issued gradually through mining or minting. This is common for many tokens, especially those that are pre-mined or fixed-supply coins.

Next, understand why mining absence supports this possibility. If there is no mining, no ongoing issuance mechanism exists to increase the supply over time. Therefore, any future supply must have already been created upfront, otherwise it would never reach holders. This aligns with models where supply is capped or finite from the outset.

Additionally, ICOs (initial coin offerings) often involve selling pre-minted tokens during the sale period. The presence of a pre-mined total supply is compatible with ICO practices, because the token’s economic design does not rely on mining to distribute new units post-launch.

However, it is important to recognize that not every ICO uses pre-mined supply. Some tokens may allocate a portion to the team with vesting schedules, or use other distribution mechanisms, but the central claim—“it could be that the total supply has already been created at birth if no mining occurs”—remains plausible and consistent with how many such tokens are structured.

Potential misconceptions to avoid: assuming that all tokens must be created at birth in every case is too absolute; some designs might release supply gradually through other on-chain activities, or rely on inflationary models. Conversely, thinking that mined supply is required for distribution ignores the reality that non-mined, fixed-supply tokens are common.

In summary, the statement is plausible and aligns with scenarios where mining is disabled and the total supply is fixed or pre-mined at inception, which is a valid configuration for certain ICO tokens.

ERMCPS5440_003_2025_3 - BLOCKCHAIN AND ERM Quiz 5

In an ICO when no mining takes place, it could be that the total supply of currency has already been created at the birth of the currency

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