Deflationary Tokens - page 14. | Bitcointalksearch.org

Gayong88

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Quote from: philanthropist67 on May 27, 2020, 07:46:15 AM

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

Now many people choose the strong and well known in an exchange such as BTC and ETH. Well, all you have to do is run and work. Regarding your question above there are weaknesses so it ends like you said.

kakamrul

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A cryptocurrency with a continuously depreciating supply in its blockchain is called a deflationary cryptocurrency. Deflation can be accomplished through burning some percentage of a coin being minted, buyback and burn, buyback and hold, and many more.

Abiky

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Quote from: philanthropist67 on May 27, 2020, 07:46:15 AM

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

To be honest with you, most deflationary coins are simply not worth the investment. Only a small few like Bitcoin, ETC, and Maker DAO, are worth a shot. This is largely because value doesn't necessarily come from deflation, but rather usability. If a cryptocurrency or token is deflationary but has no real use cases for the mainstream world, it'll simply become worthless in the long run. BNB is another deflationary token in which Binance burns a portion of its supply every once in a while. Besides this, the token is widely used on the Binance exchange for fee discounts, token creation on Binance Chain, and more. As it combines deflation + utility, it has managed to obtain a relatively high price on the market.

If you pick the right tokens that are deflationary by design, your investment will grow by a large margin over time. Bitcoin is well-known to be the best deflationary cryptocurrency you can invest right now. By playing your cards right, you'll be able to live a steady financial life for the foreseeable future. Remember, "not all that glitters is Gold". Just my thoughts Grin

RomiM

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Quote from: enhu on June 25, 2020, 01:14:50 PM

Quote from: RomiM on June 25, 2020, 01:09:33 PM

Inflation in a controlled manner always bring rise in price as we have seen in bitcoin. On the other hand ethereum has no limit of how many eth will be generated and is also doing good. Deflationary tokens like BOOM can also make a good impact since they are bringing down the total coins in circulation. They are new that's y such coins have to answer so many questions.

Ether is a utility token which anyone with ERC tokens will need it when sending. Anyone engaging in ERC tokens and trading will need ETH that is why its not going zero. But with Boom its yet unclear what its purpose but just deflationary token not very different to the team burning the own tokens milestones after milestones yet the price didn't change over time.

That's true. I think burning down token is a utility in itself. Not many coins are burned on every transaction just 1%. People are scared of them like they will be gone the next day they work up. I am keeping an eye on them as well as in my portfolio also.

Taufik blackspade team

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Quote from: FLHippy on June 26, 2020, 06:56:01 AM

Deflationary tokens don´t make any sense until you give them some value, for example, back them with some luxury assets like gold. Because deflationary means that in the future there will be fewer tokens than now. But, when you think about it people won´t use it because they will be :)motivated to hold. But you need to give them the reason why hold, why it has a value.

the reason is the use-value of real platform development. when they have a platform that continues to grow and demand continues to grow, while the supply of coins decreases it will strengthen their prices. some assets like that of course will make investors hold and not trade it in the long run.

FLHippy

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Deflationary tokens don´t make any sense until you give them some value, for example, back them with some luxury assets like gold. Because deflationary means that in the future there will be fewer tokens than now. But, when you think about it people won´t use it because they will be :)motivated to hold. But you need to give them the reason why hold, why it has a value.

Inkdull

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Projects with deflationary feature are always over hyped, sooner or later you will start seeing their true figure, I got many deflation tokens through Airdrops and most are now useless, now I have no interest in deflation tokens anymore

DarkDays

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Quote from: VIP BTC on June 25, 2020, 04:52:50 PM

Quote from: philanthropist67 on May 27, 2020, 07:46:15 AM

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.

My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

I think this is an option for those who create coins with high supplay, so they cannot control the circulation of coins properly due to the high amount. And make prices worse. If they reduce the number of coins, this will improve the price of the coin for the better. As long as they are still developing the system in any way, the coins are worth investing.

I think you are overlooking the fact that it does not matter what your deflation rate is, if your coin is worth nothing, then no matter what you burn or deflate from it, it would stay worth nothing. You'd just be piggybacking on the investments made by early investors and artificially boosting the prices, which would not mean anything. It beats the purpose of having a "cryptocurrency" in the first place. This is a very subversive tactic used by corporates, and unfortunately most of us crypto lovers cannot wrap our heads around the subject and celebrate and crave deflationary tokens and coins without even understanding the repercussions.

These tokens are mostly just ticking time bombs that will explode in the face of noob investors eventually.

Twinkledoe

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Quote from: VIP BTC on June 25, 2020, 04:52:50 PM

Quote from: philanthropist67 on May 27, 2020, 07:46:15 AM

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

I think this is an option for those who create coins with high supplay, so they cannot control the circulation of coins properly due to the high amount. And make prices worse. If they reduce the number of coins, this will improve the price of the coin for the better. As long as they are still developing the system in any way, the coins are worth investing.

That is if they have real purpose in the market. But if they are just burning just to reduce their supply and rely on traders, I don't think their price will be valuable. Because sooner or later, traders will know that this token have no actual application and without it, it would be very hard to elevate its value. Traders will jump from one project to another so without their developments, they will just move on to the next one.

VIP BTC

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Quote from: philanthropist67 on May 27, 2020, 07:46:15 AM

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

I think this is an option for those who create coins with high supplay, so they cannot control the circulation of coins properly due to the high amount. And make prices worse. If they reduce the number of coins, this will improve the price of the coin for the better. As long as they are still developing the system in any way, the coins are worth investing.

enhu

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Quote from: RomiM on June 25, 2020, 01:09:33 PM

Inflation in a controlled manner always bring rise in price as we have seen in bitcoin. On the other hand ethereum has no limit of how many eth will be generated and is also doing good. Deflationary tokens like BOOM can also make a good impact since they are bringing down the total coins in circulation. They are new that's y such coins have to answer so many questions.

Ether is a utility token which anyone with ERC tokens will need it when sending. Anyone engaging in ERC tokens and trading will need ETH that is why its not going zero. But with Boom its yet unclear what its purpose but just deflationary token not very different to the team burning the own tokens milestones after milestones yet the price didn't change over time.

RomiM

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Inflation in a controlled manner always bring rise in price as we have seen in bitcoin. On the other hand ethereum has no limit of how many eth will be generated and is also doing good. Deflationary tokens like BOOM can also make a good impact since they are bringing down the total coins in circulation. They are new that's y such coins have to answer so many questions.

enhu

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Quote from: DarkDays on June 25, 2020, 10:37:02 AM

This is practically the same as the burn mechanism many coins use to incentivize growth.

I don't think the mechanism in-and-of itself is necessarily enough to ensure a token or coin will appreciate in value simply because the supply is lower.

Supply and demand-based appreciation only works when the demand outstrips supply, and I'd imagine that's unlikely to happen for a cryptocurrency that is trying to force appreciation rather than building utility value.

Then again, looking at how BNB has pumped as a result of its burns + increased utility value, it can work under the right circumstances.

There are DPOS tokens in which the supply keeps rising in supply but the price also is almost stable. The point is that utility is the best way to make the value of the token rise up without it its hard to see the light under the tunnel. Deflationary Tokens seem like a hype only much like you said about the previous project that just wanna burn tokens. I'm curing to see since every tx burns certain % which means part of the circulating supply is burned itself.

amos77978

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Quote from: philanthropist67 on May 27, 2020, 07:46:15 AM

I am well aware of coins with controlled inflation like BTC, where a finite number of coins will be generated at a controlled rate. Very recently I came across deflationary tokens where coins are destroyed whenever a transaction is made and they will end at some time.
My question is what is the purpose of creating such coins? Are they worthy enough to be invested ?

it simply means the coin will become scarce.. it's a nice idea for crypto currencies.. but at thesame time.. for it to attain meaningful value it still depends on the demand of the coin.. even when tokens are destroyed on each transaction..

Ann Impas

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That's what most tokens become when it hits the market. Just a coin to dump. Which means what? Which means that the coin you initially thought can make you good money gave you close to none. If you want to survive in the market you must have originality. Because investors and traders are sick of tired on the same concept all the time. So if you look at it, There will only be a handful of projects out there that will not become a Deflationary token. That's just how it is.

DarkDays

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This is practically the same as the burn mechanism many coins use to incentivize growth.

I don't think the mechanism in-and-of itself is necessarily enough to ensure a token or coin will appreciate in value simply because the supply is lower.

Supply and demand-based appreciation only works when the demand outstrips supply, and I'd imagine that's unlikely to happen for a cryptocurrency that is trying to force appreciation rather than building utility value.

Then again, looking at how BNB has pumped as a result of its burns + increased utility value, it can work under the right circumstances.

SeanCasey

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Quote from: Mianae on June 25, 2020, 05:52:55 AM

The question should be where does tokens burnt come from? Are they bought from exchange if yes then there's room for price growth as supply is being reduced. If such token models can create utility for their projects, token burn will create scarcity and price will be up for everyone invesiin it.

They're usually burning a % of every on-chain TX. Some have dapps that require keeping coins tied in a smart contract. Some pay dividends too

Mianae

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The question should be where does tokens burnt come from? Are they bought from exchange if yes then there's room for price growth as supply is being reduced. If such token models can create utility for their projects, token burn will create scarcity and price will be up for everyone invesiin it.

SeanCasey

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A lot of ignorance in this thread. Sucks to read as an econ geek.

Deflation isn't a gimmick, it's a traders tax. Too high and people won't trade, too low and supply won't constrict.

Deflation takes time, if these cryptos can build an ecosystem, and destroy supply, it doesn't take much money to move them up.

BOMB, FUSE, SHOCK, SHUF, PYRO, FRAG, have dapps and features unique to themselves. If they can stay alive until bull season, they'll probably make it, they generally keep more value when crypto crashes. They have crazy volatility, they're like little Bitcoin's in that sense.

OasisDre

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Deflationary feature is a very useful tool to create hype, that's how I see this feature, I haven't seen any big project using deflation as part of their features, inflation is just better, that's why we see only bomb like projects using this feature, newbies will definitely say I'm wrong but the more they get older in crypto space they will see

Topic: Deflationary Tokens - page 14. (Read 3834 times)