Although the word seems to pass a different meaning, burning cryptocurrency is very beneficial. Burning in cryptocurrency is a method used by crypto projects to influence the price of a token or coin in the market positively.
METHODOLOGY:
The method or mechanism behind burning is to remove a quantity of a token or coin from market circulation. This reduction in circulation/availability of a token or coin causes the token or coin to be high on demand and thus because of its demand, the value increases. BNB, Stellar, USDT have been burned with this method.
Another method of burning used by XRP is the reduction in the number of allowed transaction on a network making the possibility of a distributed denial-of-service (DDoS) attack less possible. A distributed denial-of-service (DDoS) attack is an attack made to a server or website by multiple computers from a cyber criminal group that makes a server or website appear crowded, very crowded that the real people supposed to use the service, have little or no access.
WHERE IS THE TOKEN OR COIN REMOVED TO?
The token or coin is reduced from circulation by the purchase of a large amount of it ( buy back method) or the project itself rendering some of the token or coin it has not issued yet obsolete by transferring the token or coin into a frozen private address called a burn address.
CAN THE TOKEN OR COINS BE RECOVERED FROM THE BURN ADDRESS?
No, they are called burn address because these accounts have no private keys hence the token or coin will remain there. These burn address are sometimes made public so that anyone can view them in their non existent state.
Some projects burn token or coins one time while some others conduct burns occasionally.
source
__________________________________________
Next time you hear "Burning" within the cryptocurrency environment, don't start thinking that something is in flames.
Topic: Burning cryptocurrency. - page 2. (Read 330 times)
Jump to: