Topic: Burning cryptocurrency. (Read 330 times)

Considering the fact that they didn't leave any altcoin that has done this in the past I wouldn't be so sure about what the "altcoin investors" are going to do. They seem to only care about the pumpability of the altcoin not security or utility of it.

That's a good point.

Ethereum had a centralized action back in 2016 for getting the hacked ETH back. There was no transaction reversed but with new chain, the tx was invalid. Take this as an example.
It’s possible that a fork can invalid a tx. I mean centralization is there and technically it’s possible- https://levelup.gitconnected.com/how-ethereum-reversed-a-50-million-dao-attack-cee528d8c030

They don't have to be burned for this to happen. Centralization can result on even worst scenarios. In 2016, a hacker stole $50 million of ether and the community decided to hard fork it and reverse the theft transaction! So, as pooya87 pointed you, there is isn't such thing as burning a centralized coin, because theoretically you don't burn it. The coins can be spent if the majority say so and even worst, if Vitalik wants to hard fork it.

This is a major difference with Bitcoin. It doesn't matter what the majority say.

thanks for your answer. So, if this happens, isn't that the coin will abandoned by the investor? If in the example of Ethereum do that, then I believe investors and the community will abandon the coin immediately. That's what I thought.

However, the Mint function of the token is what the user should be able to know. Because in tokens with this function, creators can freely mint tokens as he wants. So even if it is burned, the coins can increase if the developer wants to do this. Again, the consequence is that a big dump will occur, I guess only a scam developer would be willing to do this. But still can't imagine about using tokens from dead address.

At least, this is new knowledge for us, to careful about this possibility, if not ethereum, another coins may do that.

You know you can keep burning tokens and burning again with not much improvement in value? Yes I've seen this many times before, adoption rate is now more about the development of a project, years ago burning tokens can make people FOMO into the project but today things are different

Technically they can't, but my arguments are about changing the system. For example a bank can not close your account overnight and don't give you your money but they very well can if they wanted to. Or in ethereum terms they shouldn't have reversed all those valid blocks but nobody could prevent them from doing so.
Lets say a token with a huge burnt supply gains a high value, nobody can stop the ethereum foundation and Vitalik Butterin from creating a new fork to spend those burnt coins.
That's the problem with centralization.

the price of BnB during 2017 is like .1 USD, nobody had an interest during those time with the site not that perfect, slow, and a bit laggy, now the token is in demand and is mostly using especially the fee is cheaper than ethereum, of course, the price will go up, also with the help of burning percentage of the coin, we could see the price rise maybe 1000 to 2000 USD I think in the future.

This is wrong. There's a huge difference between not knowing the private key and not having a private key. I'll take an example with this burning legacy address: 1111111111111111111114oLvT2.

By decoding it its base58 format we get a 160-bit hash:

There's no one telling you that it doesn't have an ECDSA private key. Actually, it is highly likely to have around 2⁹⁶ different private keys that no one knows. Sure, it may have no private keys, but I always follow the possibilities. Anyway, since you can't prove that there are no keys that produce that hash, it's wrong posting such statement.

Okay, so far I believe that tokens that have been sent to the burn address are tokens that cannot be returned by anyone. Examples of cases in ETH or BSC. When coins are sent to the dead address (on average sent to 0x000dead) can the ETH/BSC developer return all these tokens? Or can the smart contract withdraw the token sent to that address to be returned to the original address. Or is it that only the "potential" exploitation of the smart contract can bring it back?

Then, what if it is sent to 0x0000000 does this have the same system? Are there any examples of coins found doing this before, since I never know this case?

Burning tokens or coin max supply works and it affects value but not in every case, a project should not be built for burning sake only, something you can easily find with deflationary tokens, they have no good use case and yet the max supply keeps shrinking, in the end it doesn't matter so burning supply is only for very good projects not shitcoins

The correct answer is yes.
In a decentralized cryptocurrency such as bitcoin the protocol has to change through a hard fork to make coins sent to an unspendable output (ie. burnt) spendable again. This obviously won't happen with no solid reason because you have to convince the entire bitcoin network to go with the change.
In a centralized cryptocurrency (ie majority of altcoins) this is trivial since the owners can simply change the protocol and make the coins they burnt spendable again. There is also the problem with their protocols that the burnt coins may not actually be burnt and due to exploits and security flaws those coins may already be spendable.

By the way burning tokens is a market manipulation technique to get that shitcoin to pump and nothing more.

A simple news of burning would spike a huge demand? You must be a naïve investor if you believe in this. What if KissMyAssCoin (K-MAC) would burn half of their supply tomorrow, would you buy some K-MAC today? Or do you think half of its supply is not big enough?

Before you speak of marketing, speak of what to market first. Projects cannot just entice investors simply because they are marketing. Their token's demand won't increase simply by spreading the news of a huge burning event.

That's right.

When an influential person like CZ tweets about his coin and the update about it, people rush to have it. Since it's about to happen within the next few days, this makes it going to be the best time for them to buy it.

Quite slowed down to $550 and all up to those investors who are coping up with the burning event.

But a simple news with regards to burning a coin would then spark a huge demand, making investors take the opportunity of it then leave right after the burn. More specifically, burning is a cause of having a huge demand and volume effect. Some coins didn't really skyrocket after burning? It's simply because they don't really burn that high nor their marketing really isn't that effective. You cannot just expect some coins to grow after burn without even marketing it, right?

I'm sure you've observed several projects that do burn. Currently, burning is no longer a major factor in rising prices and increasing investor interest. Nowadays people are more interested in the project, how it works and the product. In recent years I have observed BNB, if I'm not mistaken they have also set fire to it. Apart from burning they have a real product. Innovations from BSC owners continue to grow. We can see the effect. They have experienced a very strong increase. So it can be concluded that burns and innovation from a well-run project will attract investors to invest their money. So don't analyze there will be burns, then the price will go up, that's wrong in my opinion.

CZ posted on Twitter that another burn is happening soon, hence why people are scrambling to buy more

https://twitter.com/cz_binance/status/1381277694705295362

The process of burning is not as important unless it is accompanied by a change in two things, the first of which is the supply so that there is a maximum supply or a certain level of annual inflation that is at 1% or less, and the second reason is an increase in demand. Unless there is an increase in demand, then controlling the supply leads to prices Hence a fake loss of your money when investing.
burning is an indication that the currency is somewhat centralized and not subject to a decentralized consensus.

Although it's not a literal meaning for cryptocurrencies, the logic is the same as totally wiping out a specific crypto's supply to lessen the circulating supply of that altcoin.

Me either.

Take note that it's not yet burned but the price keeps on shooting it up. I'm not shilling it but I'm thinking that it can go for more as it approaches and more after it burns.

Speaking of burning, my heart aches each time I look at BNB. That thing has shot up by over 100 USD in just 2 days!

Burning does not necessarily mean the token or coin will be growing in demand. There is no necessary connection between the two. However, among coins and tokens which are already popular and in demand, burning will definitely affect the demand since there is a foreseen increase in price. But there were already countless of burnings among least popular coins and tokens and yet no increase in demand followed. So this cannot be merely used as a strategy by any project to spark an increase in demand.

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.