Coin burning is not a foreign thing in the crypto industry. This process is one of the processes required to balance the token cycle.
Briefly, coin burning means the elimination of a number of existing cryptocurrency coins with the aim of slowing the rate of inflation or reducing the total supply of coin cycles.
This process is often done by most altcoins and small tokens to control the amount in the cycle, thus allocating large incentives to investors.
How did it happen?
Coin burning only occurs if the owner enters a valid and sufficient amount into the ‘eater address’ which is also synonymous as ‘black hole’ as the private keys to the address are not owned by anyone.
Negative (example: -7) or invalid (example: 0) numbers will not be accepted. Meanwhile, if the owner does not have a sufficient amount of coins and updates, the coins will be burned automatically.
It is important to know that the owner will not get the coin back once it has been burned.
The closest example, Ripple will burn its tokens gradually in each transaction. A small number of XRP coins will be burned in the transaction process.
Meanwhile, Tether (USDT) will generate tokens when they put funds into storage and burn according to the amount of funds withdrawn.
Overall, the coin burning applied in this industry shows seriousness in balancing the value of cryptocurrencies. Inflation invites risk to the coin because it is able to lose its value and because of that the cryptocurrency has to go through the process of burning the coin.
