What is coin burn? Being in the world of cryptocurrencies, you have probably come across many terms that are not understandable to you. Some occur often and others rarely. One term that you should definitely know is "COIN BURN". It is a simple and logical term, and knowing it can be useful to you. So, "coin burning" is nothing more than the irreversible removal of units of a specific cryptocurrency/token. In practice, it is nothing more than reducing its total supply. Coin burning can be, for example, written in a smart contract and appear cyclically to prevent an excessive emission of a specific cryptocurrency. A limited supply helps to keep the digital currency in check (see the term inflation), ensure its uniqueness, and increase its value. It is usually a well-thought-out and sensible mechanism described in the white paper. It has nothing to do with owners losing their tokens. So, no worries, it is not burning your tokens held in a wallet :) Burning is also beneficial for exchange owners because, besides increasing the value of tokens, it allows for attracting new users or customers to the exchange. What are the main reasons for coin burn? - a more effective consensus mechanism, it applies to coins that use Proof-of-Burn (POB), and increasing the token's value (supply and demand). How does token burning work in practice? Every holder of BNB units triggers the burn function, thus informing the smart contract that they want to burn a certain amount of BNB units. The contract then verifies whether the owner has the specified amount of BNB in their wallet and whether the number of units provided is positive, as only a positive amount can be burned. If the person invoking the function does not have a sufficient number of BNB units or if the specified number is incorrect (e.g., 0 or -5), the burn function will not be executed. However, if they have enough units to carry out the burning, the specified number of BNB units will be deducted from their wallet. At this point, the total supply of BNB is updated (decreased), and the specified BNB units are burned. Transactions related to repurchasing native tokens are publicly announced on the blockchain network. Therefore, rest assured, you physically cannot miss this information. However, all exchange users must be alert. It is good to know when such a situation will occur. It is estimated that the first tokens were burned in 2017. More than 900 thousand native tokens were destroyed at that time. Remember! Units of cryptocurrency subjected to the Coin Burn process cannot be recovered. They are irreversibly destroyed. This process is automatic, and as a holder, you have no control over it. It is to be expected that the phenomenon of coin burn will be increasingly used and gain popularity. However, there are no plans or statistics indicating specific numbers. Nevertheless, for traders, such coins are a clear signal regarding investment opportunities, trends, and ultimately profits (the text is taken from a private blog ZaHajsZKryptoBaluj)
What is coin burn? Being in the world of cryptocurrencies, you have probably come across many terms that are not understandable to you. Some occur often and others rarely. One term that you should definitely know is "COIN BURN". It is a simple and logical term, and knowing it can be useful to you. So, "coin burning" is nothing more than the irreversible removal of units of a specific cryptocurrency/token. In practice, it is nothing more than reducing its total supply. Coin burning can be, for example, written in a smart contract and appear cyclically to prevent an excessive emission of a specific cryptocurrency. A limited supply helps to keep the digital currency in check (see the term inflation), ensure its uniqueness, and increase its value. It is usually a well-thought-out and sensible mechanism described in the white paper. It has nothing to do with owners losing their tokens. So, no worries, it is not burning your tokens held in a wallet :) Burning is also beneficial for exchange owners because, besides increasing the value of tokens, it allows for attracting new users or customers to the exchange. What are the main reasons for coin burn? - a more effective consensus mechanism, it applies to coins that use Proof-of-Burn (POB), and increasing the token's value (supply and demand). How does token burning work in practice? Every holder of BNB units triggers the burn function, thus informing the smart contract that they want to burn a certain amount of BNB units. The contract then verifies whether the owner has the specified amount of BNB in their wallet and whether the number of units provided is positive, as only a positive amount can be burned. If the person invoking the function does not have a sufficient number of BNB units or if the specified number is incorrect (e.g., 0 or -5), the burn function will not be executed. However, if they have enough units to carry out the burning, the specified number of BNB units will be deducted from their wallet. At this point, the total supply of BNB is updated (decreased), and the specified BNB units are burned. Transactions related to repurchasing native tokens are publicly announced on the blockchain network. Therefore, rest assured, you physically cannot miss this information. However, all exchange users must be alert. It is good to know when such a situation will occur. It is estimated that the first tokens were burned in 2017. More than 900 thousand native tokens were destroyed at that time. Remember! Units of cryptocurrency subjected to the Coin Burn process cannot be recovered. They are irreversibly destroyed. This process is automatic, and as a holder, you have no control over it. It is to be expected that the phenomenon of coin burn will be increasingly used and gain popularity. However, there are no plans or statistics indicating specific numbers. Nevertheless, for traders, such coins are a clear signal regarding investment opportunities, trends, and ultimately profits (the text is taken from a private blog ZaHajsZKryptoBaluj)