Effect of currency burning on Bitcoin price

dimonstration

hero member

Activity: 2716

Merit: 698

Dimon69

Quote from: joker_josue on October 22, 2021, 12:28:07 PM

The idea of burning coins, I find invisible and meaningless. For whatever reasons they have given, it doesn't make sense to me.

If you want less currency on the market, then reduce rewards or take breaks in production. Now, throwing coins away doesn't make sense!

Token burning is just suitable for coins that has an overflowing supply. Most the project that have this feature usually considered it when creating there tokenomics. Bitcoin is exempted to that because Satoshi didn't design it that way. Bitcoin has limited small supply and its mining difficulty is much harder than typical coin that has a token burning feature. Token burning has a sense of your tokenomics was design for using it to control over supply due to fast emission rate of new token minted.

tranthidung

legendary

Activity: 2310

Merit: 4085

Farewell o_e_l_e_o

Quote from: Nathrixxx on October 22, 2021, 11:01:31 AM

1. Ever since Bitcoin Inception and launched in 2009 till date, has it ever experience any form of burning?

Potential lost Bitcoin is gift for people who still own Bitcoin. It unofficially reduce the available total supply of Bitcoin. We can not identify exact number of lost Bitcoin but we can estimate it. Note that it is just estimation.

HODLWaves
If we consider inactive UTXO with period of inactivity is 5-years⁺ that accounts for 22.86% of current supply that is 18.851M, the estimation for lost Bitcoin would be 4.3 millions.
As said, not all of 4.3M Bitcoin was lost - we usually see movement of old Bitcoin when the market needs big movement.
Additionally, not all UTXOs with ages younger than 5 years are not lost

Quote

2. Considering the bearish and bullish run of bitcoin price, does currency burning has any effect on determining bitcoin price?

Burn events have effects on price and I don't talk about Bitcoin. Burn events are for altcoins because they are centralized and owners can decide implement burn events and run their money games.

However, with a same burn event, the effects would be bigger in bull market than in bear market.

Quote

4. How can digital currency burn be carried out on a particular wallet address of a deceased person effectively without compromise.

It only happens with centralized currency like Tether USD, not with Bitcoin.

hatshepsut93

legendary

Activity: 3024

Merit: 2148

The type of coin burning that you describe happens because of the centralized supply and the holders of said supply trying to improve the image of their coin. Bitcoin doesn't really need that, because no single entity controls a significant portion of all coins. Satoshi is likely the largest holder of coins with their speculated 1 million coins, but even that is just 1/21 of supply, which is not that big compared to shitcoins that have 50% of even the whole supply premined.

If Satoshi's coins are no longer accessible, you could consider it the biggest act of "burning" in Bitcoin history, though of course those coins were not provably destroyed.

odolvlobo

legendary

Activity: 4466

Merit: 3391

1. Ever since Bitcoin Inception and launched in 2009 till date, has it ever experience any form of burning?

Not by the protocol, but coins have been intentionally burned and accidentally lost by users.

2. Considering the bearish and bullish run of bitcoin price, does currency burning has any effect on determining bitcoin price?

In theory, burning coins reduces the supply so it generally causes the price to rise. There has been no demonstration of that effect however.

3. With the use of "eater address" how effective can it be in identifying currency sent to a wrong wallet address.

Except for 1111111111111111111114oLvT2 (because its pubkey hash is 0), it is unlikely that many coins have been accidentally sent to any "burn" addresses. Here is a list of the known burn addresses with the most coins:

1CounterpartyXXXXXXXXXXXXXXXUWLpVr	`2130.83949557`
1ChancecoinXXXXXXXXXXXXXXXXXZELUFD	`480.19421570`
1111111111111111111114oLvT2	`2.99181099`
1BitcoinEaterAddressDontSendf59kuE	`1.91702244`
1NewbiecoinXXXXXXXXXXXXXXXXDN67UA8	`1.31817000`

4. How can digital currency burn be carried out on a particular wallet address of a deceased person effectively without compromise.

If someone has access to the deceased person's wallet or private keys, they can send the bitcoins to a burn address, but I don't know why they would. The idea of adding a consensus rule to burn (or recycle) coins that haven't been moved in a long time has been proposed many times, but its benefit is minor so I don't think it will ever happen.

On a related note, people are occasionally sent small amounts in an attempt to track or identify them ( so-called "dust" attack). You can safely get rid of those coins by creating a OP_RETURN transaction for each address in Electrum using the coins to pay the transaction fee.

joker_josue

legendary

Activity: 1722

Merit: 4711

**In BTC since 2013**

The idea of burning coins, I find invisible and meaningless. For whatever reasons they have given, it doesn't make sense to me.

If you want less currency on the market, then reduce rewards or take breaks in production. Now, throwing coins away doesn't make sense!

mk4

legendary

Activity: 2870

Merit: 3873

Paldo.io 🤖

1. Not technically as far as I know, but we can consider the "lost" coins as "burned". Though we can't really prove how many has already been lost, the assumption is that it's a good chunk: from people that died, wallets that have been lost, etc.

2. Burning in general should have a positive effect due to decreased supply; but taking away supply itself doesn't automatically lead to price appreciation.

3. What?

4. A protocol having a "feature" of burning coins of proclaimed deceased people is really bad because you can't really prove if a wallet is owned by a dead person in the first place. A wallet that has unmoved funds could also mean that the owner is simply just holding. Because if a wallet's owner is dead, it's pretty much "burned" anyway because the coins are taken out of the market; even though the funds aren't sent to a "burner" address.

Nathrixxx

full member

Activity: 140

Merit: 128

Digital Currency burning is believed to be a permanent removal of a particular coin or token from circulation in a bid to avoid inflation. otherwise,Coin burning is a process where cryptocurrency miners and developers remove a specific portion of coins from circulation to control their price. It is a common industry practice to incentivize long-term holding among users, by managing the price through restricting supply, i have a pool of questions regarding this for the benefit of leaning and educating crypto beginners on the forum.

1. Ever since Bitcoin Inception and launched in 2009 till date, has it ever experience any form of burning?

2. Considering the bearish and bullish run of bitcoin price, does currency burning has any effect on determining bitcoin price?

3. With the use of "eater address" how effective can it be in identifying currency sent to a wrong wallet address.

4. How can digital currency burn be carried out on a particular wallet address of a deceased person effectively without compromise.

Topic: Effect of currency burning on Bitcoin price (Read 128 times)