Deflationary Tokens - page 17. | Bitcointalksearch.org

South Park

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Quote from: Iyanu14 on May 27, 2020, 02:59:17 PM

Quote from: philanthropist67 on May 27, 2020, 08:46:15 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 ?

The advent of deflationary tokens was thought to be a very novel idea that will bring fresh innovation to the crypto industry. It was created with the aim of reducing supply when some amounts of tokens are burnt on every transaction. The developers thought this will create a scarcity in the market thereby resulting in increase in the price of the token. However, this idea have not been successful as several deflationary tokens were dead today.

It is a novel idea I will give you that but that is about it, a novel idea is not necessarily a good idea and if everything that a coin has is its deflationary nature then it is not a good coin at all and people should stay away from it, now some people may say that such coins may give profits in the short term but that is true for almost any type of coin even for those that are scams, but eventually those coins will go to zero as there is no use case for them and eventually people move on to more exciting and newer projects.

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Quote from: mersal on May 29, 2020, 10:55:33 AM

Quote from: philanthropist67 on May 27, 2020, 08:46:15 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 ?

Bitcoin is not either inflated or deflated, it is just have finite number and miners are still working on to mint bitcoins which doesn't mean the coin is inflating.But due to the inflation on fiat value the price may looks like inflating.But creating a coin with deflationary feature is just nothing other than for dumping the coins at some point so people may tend to hold in longer term but not everyone holding in long term will make reap out of it.

Advancement in technologies is really welcomed at the start. The concept of deflationary token is new and it will take time before people start digesting this new concept.

mersal

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Quote from: philanthropist67 on May 27, 2020, 08:46:15 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 ?

Bitcoin is not either inflated or deflated, it is just have finite number and miners are still working on to mint bitcoins which doesn't mean the coin is inflating.But due to the inflation on fiat value the price may looks like inflating.But creating a coin with deflationary feature is just nothing other than for dumping the coins at some point so people may tend to hold in longer term but not everyone holding in long term will make reap out of it.

Jogmania

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Quote from: philanthropist67 on May 28, 2020, 02:23:45 PM

I started this thread after coming in contact with BOOM token. They say they burn some coins with every transaction. The token is doing good https://coinmarketcap.com/currencies/boom/
This means that investors have an interest in deflationary tokens.

There are many deflationary tokens which are doing good on exchanges, like the one you mentioned. But I think its too early to say these deflationary tokens don't have much scope. Lets wait for a while and see how things turn up for deflationary tokens.

Pecunia non olet

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For me it is a pure buzzword for those who want easy money. Deflationary tokens should be for very long term hodl because the price of each coin should grow in the future, but the problem is with how you ensure the trust for a long time for the token?

pixie85

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So the makers of these coins are trying to deter people from spending and make a token for holders where whoever goes first loses?

If you hold the coin you have a chance of it going up in value but only if other people spend and burn their coins first. If everyone holds nobody gets any profit and the price remains the same? It's an interesting concept for researchers because they defy typical market logic. I don't think they are useful aside from that.

philanthropist67

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I started this thread after coming in contact with BOOM token. They say they burn some coins with every transaction. The token is doing good https://coinmarketcap.com/currencies/boom/
This means that investors have an interest in deflationary tokens.

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Quote from: philanthropist67 on May 27, 2020, 08:46:15 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 ?

If I am correct you mean to say that for transaction made the will burn the coin. Why not create a certain number of coins and then release it in the market?

Now if I want to transfer the coin or pay to someone using that coin then after the transaction is complete the coin gets destroyed and no one can use it. So, where it the adaptability, how will they create a market for that coin?

I do not understand the concept at all.

HunterUnchained

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Deflationary coins and tokens became a thing late last year and early this year for the purpose of actually creating some level of steady price appreciation due to the fact that, their supply decreases with every successful transaction made. It was quite successful with the likes of BOMB token doing extremely well in that period. Unfortunately, it became abused due to greed and developers looking to take advantage of the situation and cashing out. Several poorly developed projects caught in on the vibe and the idea become saturated with a lot of poor projects leading to people losing interest in investing in any deflationary projects. Only a few are still doing well at this time.

Krislaw

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If you're thinking of investing in deflationary token because of it's percentage of deflation or whatever, you should stop. Deflationary tokens was a trend about a year ago, most of them are no where to be found. No use case, just pump and dump.

The hype they have is reduction in supply making it scarce. Imagine 5% burn rate and you lose 5$ for every 100$ you send, it doesn't make sense in any way.

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Quote from: philanthropist67 on May 27, 2020, 08:46:15 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 ?

Tokens that have deflation features will usually be stamped as digital gold just like bitcoin, but if each token transaction is burned, I think the tokens only want to get FOMO.
Typical short-term tokens.

Iyanu14

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Quote from: philanthropist67 on May 27, 2020, 08:46:15 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 ?

The advent of deflationary tokens was thought to be a very novel idea that will bring fresh innovation to the crypto industry. It was created with the aim of reducing supply when some amounts of tokens are burnt on every transaction. The developers thought this will create a scarcity in the market thereby resulting in increase in the price of the token. However, this idea have not been successful as several deflationary tokens were dead today.

LazerPanther

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Quote from: Festac on May 27, 2020, 09:18:40 AM

Please kindly share the name of the token, many deflationary tokens I knew are almost dead now due to lack of use case, investors are now smarter to avoid projects that have no real life use cases because in a very short time they will become worthless

Yes, investors are much smarter right now and most of these altcoins are dead in this market. Investing in altcoins is a very dangerous investment, so it is important to consider if we want to invest in them.

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A deflationary token is one where tokens are removed from the market over time. Tokens can be removed from the market via a variety of methods including token buy-backs and token burns from the token creators.

The main issue that deflationary tokens present is that they will often be seen as a security in the eyes of regulators. This is because the deflationary mechanisms used to buy the tokens back from the market are generally dependent on the success of the company and if the company performs well, more tokens can be bought from the market which will often improve the health of the ecosystem, and if the company does poorly, they will not have the resources to buy as much off the market leading to an excess supply and often times, and unhealthy ecosystem. Because of this direct relationship between the success of the company and the health of the token ecosystem, these deflationary tokens will almost always be classified as a security.

In some cases they are ok to invest in. But let say 50/50

Towerbreeze

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Inflationary
Deflationary
Burning max supply

All these should be just a feature for projects, don't invest in projects that only rely on these features, they have nothing good to offer you but losses

alani123

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Destruction of currency is more about economics rather than technology. It's true that a coin could be programmed to do that, but is it really worth to do that beyond a joke?
Economists have mostly focused on the concept of systemic (FIAT) money when discussing destruction of currency. Destroying crypto isn't the same as burning cash, because such transaction is permanent in crypto. But central banks are known to utilize the withdrawal of cash from the economy as a tactic.

However, introducing a measure that would burn money for every transaction would introduce bad disincentives in any economy. Imagine if you knew that by any transaction, some portion of your spent money would burn. Not go to someone else, but burn. That's a strong disincentive to transact, at all. And now bring that in the crypto sphere where there is real currency competition. You not have a coin that no one wants to spend, and can only derive monetary value from it in exchange for any other currency. Well congrats, you got yourself a coin poised to stagnate...

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Do not invest on a coin because it's deflation token, I've done this in the past and the coins I hold are dead or about to, no good volume on exchanges anymore, Bomb token is the only last man standing and even this bomb token had no real use, maybe people just like the project that's why it's still alive today

South Park

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Quote from: philanthropist67 on May 27, 2020, 08:46:15 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 ?

That is nothing more but a gimmick, do not invest in those coins, they are trying to make you believe that as they keep destroying tokens that somehow this is going to make their coins more valuable and while without a doubt they are able to affect the supply side of the equation with this they are unable to affect the demand side, so it doesn't matter if they keep burning coins to the end of time if no one wants to have those coins it doesn't matter, as such you should not waste your time with projects like that.

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Certain trader came with the concept that supply limit is a prime factor for deciding the price of the coin and so came the time of deflationary coins. Though the limited numbers made it easier for manipulation, the coin with just a deflationary feature got no interest from investors. They were in fashion around 2016-17.
But not all deflationary coins are lost, there are other genre of coins that have specific purposes and are also deflationary are still going strong.

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Quote from: VDraci on May 27, 2020, 08:51:59 AM

On every transactions tokens get burned but be hold my friend that's all there is to that coin, nothing more than this deflationary feature, how will this coin be useful to the public? Does it makes sense to invest on a token or coin because it's a deflationary token? The answer is NO

Quote from: poodle63 on May 27, 2020, 12:02:09 PM

They are not worthy to be invested. There are so many scam deflationary token and this idea is not needed by the community.

Ofc buying a coin just because it has a deflationary economy makes no sense. However, a good project may burn tokens so the total supply goes down over time.

Ethereum Casper MAY have a deflationary economy in the future, according to Vitalik Buterin in official Ethereum Github:

Quote

Because of the lack of high electricity consumption, there is not as much need to issue as many new coins in order to motivate participants to keep participating in the network. It may theoretically even be possible to have negative net issuance, where a portion of transaction fees is "burned" and so the supply goes down over time.
https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ#what-are-the-benefits-of-proof-of-stake-as-opposed-to-proof-of-work

So, go buy ethereum if you think ethereum will ever reach PoS in ethereum 2.0 Wink

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