What is Coin Burning | Bitcointalksearch.org

jeeri

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Quote from: mensha on November 23, 2017, 11:02:25 AM

Can someone explain what is coin burning and what is the purpose of it?

Coin or Token burning is nothing but making them inaccessible forever.
For example, if you are sending any ERC20 tokens to 0X ethereum address, they are not retrievable forever. so you lost them. there is no way to get them back. similarly, if you are sending them to an invalid address(which is not compatible with it at all), the coins/tokens will be lost. Coin/Token developers may use the first approach as per my knowledge.

Purpose: To reduce the inflation burning is the common thing to follow provided they have huge amount of coins/tokens available Tongue

When the swapping is done: Sometimes, devs create a new coin/token/project and use the old/existing coins/tokens. People who possess old coins/tokens can get the newly created coins/tokens by this method. If there are some old tokens/coins are left out, dev can burn them to reduce the inflation or to quote the exact available coins or to clean up the old ones all the way.

muf18

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Logically it should go to this as an answer.
https://bitcointalksearch.org/topic/slimcoin-first-proof-of-burn-currency-decentralized-web-1141676
First cryptocurrency, with PoB block generation.

Kprawn

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Quote from: suzanne5223 on November 27, 2017, 05:44:42 PM

Quote from: AdolfinWolf on November 27, 2017, 03:54:41 PM

Quote from: suzanne5223 on November 27, 2017, 03:30:40 PM

Quote from: Fire Rabbit on November 23, 2017, 04:05:03 PM

Coin burning is actually called proof of burn. Proof of burn is a protocol used by various altcoins to reduce the current available supply, whereby a specific portion of coins in circulation is sent to a wallet no one has access to (This is mainly used in ICOs). This eliminates these coins from being spendable, although they will remain to be a part of all of the existing coins ever to be generated. Proof of Burn transactions are also recorded on that cryptocurrency’s blockchain, providing proof that the coins would never be used to transact again.

If I understand what you said the ICO or coin owner send the coin to an address which no one have access to in other to increase their coin total circulating supply on the coin capital market so that the massive circulation we get the attention of investor?

No. Quite the opposite actually, it is done to remove/ lower the total circulating supply. thus making the coin more scarce/rare.

I guess companies also do it if their ICO didn't sell out the 100% of available tokens, they'll just burn the ones which weren't sold. ( In order to be fair to investors etcetera.)

Oh ok. Thank for you enlightenment and now I understand how the whole thing work but whoever first start this coin burning from the get go is completely a genius.

No genius involved, simply because it is done to decrease the circulating supply. It can be done with most commodities. The

farmers can collectively burn 80% of their corn fields and push up the price of corn, if they wanted to. I think it is highly

unethical to do that, but that is just my own opinion. The logic stands .... eliminate some of the supply and the price will

increase. Roll Eyes

benj_pirate

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how can you pay devs by burning tokens ?

suzanne5223

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Quote from: AdolfinWolf on November 27, 2017, 03:54:41 PM

Quote from: suzanne5223 on November 27, 2017, 03:30:40 PM

Quote from: Fire Rabbit on November 23, 2017, 04:05:03 PM

Coin burning is actually called proof of burn. Proof of burn is a protocol used by various altcoins to reduce the current available supply, whereby a specific portion of coins in circulation is sent to a wallet no one has access to (This is mainly used in ICOs). This eliminates these coins from being spendable, although they will remain to be a part of all of the existing coins ever to be generated. Proof of Burn transactions are also recorded on that cryptocurrency’s blockchain, providing proof that the coins would never be used to transact again.

If I understand what you said the ICO or coin owner send the coin to an address which no one have access to in other to increase their coin total circulating supply on the coin capital market so that the massive circulation we get the attention of investor?

No. Quite the opposite actually, it is done to remove/ lower the total circulating supply. thus making the coin more scarce/rare.

I guess companies also do it if their ICO didn't sell out the 100% of available tokens, they'll just burn the ones which weren't sold. ( In order to be fair to investors etcetera.)

Oh ok. Thank for you enlightenment and now I understand how the whole thing work but whoever first start this coin burning from the get go is completely a genius.

AdolfinWolf

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Quote from: suzanne5223 on November 27, 2017, 03:30:40 PM

Quote from: Fire Rabbit on November 23, 2017, 04:05:03 PM

Coin burning is actually called proof of burn. Proof of burn is a protocol used by various altcoins to reduce the current available supply, whereby a specific portion of coins in circulation is sent to a wallet no one has access to (This is mainly used in ICOs). This eliminates these coins from being spendable, although they will remain to be a part of all of the existing coins ever to be generated. Proof of Burn transactions are also recorded on that cryptocurrency’s blockchain, providing proof that the coins would never be used to transact again.

If I understand what you said the ICO or coin owner send the coin to an address which no one have access to in other to increase their coin total circulating supply on the coin capital market so that the massive circulation we get the attention of investor?

No. Quite the opposite actually, it is done to remove/ lower the total circulating supply. thus making the coin more scarce/rare.

I guess companies also do it if their ICO didn't sell out the 100% of available tokens, they'll just burn the ones which weren't sold. ( In order to be fair to investors etcetera.)

suzanne5223

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Quote from: Fire Rabbit on November 23, 2017, 04:05:03 PM

Coin burning is actually called proof of burn. Proof of burn is a protocol used by various altcoins to reduce the current available supply, whereby a specific portion of coins in circulation is sent to a wallet no one has access to (This is mainly used in ICOs). This eliminates these coins from being spendable, although they will remain to be a part of all of the existing coins ever to be generated. Proof of Burn transactions are also recorded on that cryptocurrency’s blockchain, providing proof that the coins would never be used to transact again.

If I understand what you said the ICO or coin owner send the coin to an address which no one have access to in other to increase their coin total circulating supply on the coin capital market so that the massive circulation we get the attention of investor?

AdolfinWolf

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Quote from: Stan235 on November 27, 2017, 05:09:03 AM

And how can we check that the adress has no PK?

If i recall correctly:

Usually this is done by using the base58 encoding to create something unique such as 1BitcoinEaterAddressDontSend8MUo1T, which would be impossible to generate on a normal wallet, due to the amount of hashpower that would be needed to create an adress like this.

Stan235

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And how can we check that the adress has no PK?

donDrey

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In case of Counterparty, burning Bitcoins is done as a means of distribution of the Counterparty tokens (XCP). Users receive an amount of XCP proportional to the amount of Bitcoin burned.

By burning the Bitcoin, instead of just collecting it as payment, the Counterparty developers have more incentives to make their own platform viable, unlike the various recent "ICO's", where the developers could retire on a tropical island with all the money they collected.
Credit: https://www.reddit.com/r/Bitcoin/comments/6llq7p/eli5_why_do_people_burn_coins/

Mystica101

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Coin burning is some like to reduced the current amount of supply and to make the circulation more live in the market if it is some what like dying (altcoins). In the first place why the developers make huge supply for their coins and then make a plan by burning it. I guess this will be a major turn off for some investors.

sunny_gsb

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Coin burning can be a way to promote the virtue of a particular crypto currency as being socially responsible. I've seen many new coins after an ICO that have used this tactic to swell grass root support for the legitimacy of the currency.

Setting the limit on the number of coins in itself is arbitrary, if its to 8 decimal places.

Bonsaiav

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At first glance, destroying bitcoins sounds quite sadistic.
The most common sadness to is that those Coinburning could have been used to pay developers, or fund marketing efforts.

Quote from: chimcoin on November 25, 2017, 11:15:45 AM

It sound actually new to crypto enthusiasts. Burning Coins or coin burning has emerged as a new tool for growth in recent times. In past few months, few projects used this approach to drive the market value growth to upto 10x.The idea is that miners should show proof that they burned some coins - that is, sent them to a verifiably unspendable address.

And I think, that is indeed a valid consideration.

liseff3

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By burning those bitcoins did not in any way diminish the amount of bitcoin present in bitcoin network.
In the technique, bitcoins are (burned) by sending them it to an address that is guaranteed to have no known or discoverable private key. Means, that those coins can never be used again.

benj_pirate

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Are you guys saying that every-time a team "pretend" to burn coins, the only thing they do is transfer this coin to an address with "unknown" PK ?
If it is the case, I'm disappointed.

karmakeddon

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Quote from: mensha on November 24, 2017, 09:14:40 AM

Yes. well explained. Is it possible to burn the coins after well established?

Definitely. All people need to do is to send it on a wallet which no one will have ever access to. This will make the coins theoretically burned as no one would be able to use them, thus effectively removing them from the running circulation of the coin. Doing this however breeds distrust if done on established coins as there will always be someone who will question the legitimacy of the said wallet and if the private keys are really lost or this is just some ploy to stockpile coins and hoard them while raising it's price at the same time.

AyaYotoko

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Coin burning is simply destroying your bitcoins. There may be differrent ways to do it . May be intentionally or non-intentionally.

RGBKey

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rgbkey.github.io/pgp.txt

Quote from: chimcoin on November 25, 2017, 11:15:45 AM

It sound actually new to crypto enthusiasts. Burning Coins or coin burning has emerged as a new tool for growth in recent times. In past few months, few projects used this approach to drive the market value growth to upto 10x.The idea is that miners should show proof that they burned some coins - that is, sent them to a verifiably unspendable address.

It was used a long time ago too, with things like mastercoin iirc. People have actually been using it less as of late, in favor of ICOs where they sell other people coins instead of burning the payment coin.

chimcoin

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It sound actually new to crypto enthusiasts. Burning Coins or coin burning has emerged as a new tool for growth in recent times. In past few months, few projects used this approach to drive the market value growth to upto 10x.The idea is that miners should show proof that they burned some coins - that is, sent them to a verifiably unspendable address.

mensha

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Quote from: AdolfinWolf on November 23, 2017, 11:19:55 AM

Quote from: mensha on November 23, 2017, 11:02:25 AM

Can someone explain what is coin burning and what is the purpose of it?

It means you sent bitcoin to a bitcoin adress that has no known private key. Which means they will be "burned" / go to waste.

I don't really see why people would use this in bitcoin, but i know that some altcoin developers have done this to reduce the amount of coins in circulation

As to how to make a bitcoin vanity burner adress, use the answer on this question, https://bitcoin.stackexchange.com/questions/1851/how-to-generate-a-valid-bitcoin-address-for-destroying-bitcoins

Might be a bit outdated but it should still work.

Yes. well explained. Is it possible to burn the coins after well established?

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