Abhay Chebbi, Pro-Chancellor, Alliance University, said that in the real world, coin burn would amount to making a pile of currency coins or notes, and lighting a pyre to the pile. Coin burn in the cryptocurrency world is exactly the same albeit it is the burning of the cryptocurrency virtually. Each cryptocurrency network defines a protocol for accomplishing the burn but it amounts to associating the coins in circulation with unobtainable private keys so nobody can claim them to be theirs. Additionally, the event of a Coin burn itself is recorded in the ledger books so the burn is foolproof.
According to Edul Patel, CEO & Co-founder of Mudrex, coin burning is not a new concept. However, this has gained a lot of attention lately following the recent London Hard Fork upgrade to the Ethereum network. With this upgrade, around 3.17 ETH is being burned every minute. To put this into perspective, the average price of ETH over the past seven days was $3200. It means that more than half a million dollars worth of ETH is being burned every hour! Such news manages to grab eyeballs faster.new world PC coins for sale
Prof. Chebbi said crypto creators burn the coins in an attempt to increase the value of the coins that remain in circulation. It is not very dissimilar to what happens in the realm of Oil. “If the price of a barrel of crude oil drops because there is a glut in the supply and the demand is not commensurately high, then the oil-producing nations reduce the supply so the prices go back up again. The same dynamic of supply and demand is at play behind the process of coin burning,” he told FE Online.