Although it may feel counterintuitive, burning crypto coins does not actually mean printing them out and putting them into the fire. On the contrary, it’s a process where you don’t even destroy the coins themselves. Coin burning means helping them return to mothership and strengthening the “hive.” Coin burn is nothing more than taking them out of supply for various reasons.

It can be symbolic, economic, and even strategic for the sake of a particular coin. So, if you want to learn more about this process, how it influences tokenomics, and how to burn coins effectively and with profit – we have got you covered. In this article, we will go through the most important reasons why people burn coins and how it can benefit you in the long run. So, with that in mind, let’s start burning cryptocurrency and see where it leads us!

What is the process of crypto burning? What does burning crypto mean? With plenty of speculation, let’s address the obvious – yes, you cannot use that crypto anymore. No, there will be no additional crypto for you to utilize after that process. Of course, it does not mean you will not benefit from it, as most platforms provide some level of support for their “burners.”

Nevertheless, the process refers to intentionally and permanently removing coins from circulation. This means no more crypto of this kind; you can’t exchange it, and the burning coins end their journey. At least – for this particular one. With so many reasons why, it’s best to dive into them and see what crypto projects lay ahead.

There are plenty of reasons why you would want to enjoy cryptocurrency coin burning. Even if you are not the coin creator who wants to invoke some kind of reaction from the market, it’s also possible to gain some benefits from burning crypto as an individual.

Some exchanges and coins give you rewards for burning tokens , in most cases in the native tokens like in the case of Binance coin . For example, Slimcoin works on a Proof-of-Burn basis, where when you burn the address of a particular crypto, you not only get a reward but also keep the blockchain afloat. But that’s not the only reason to do so. Let’s go over the other ones to understand the concept a little better.

Tokenomics

Starting with – tokenomics. If you have never heard of this concept, it’s a way of understanding cryptocurrency economics concerning governing and developing. In this case, a scheduled token burns can be justified by the economic need to send some of the tokens to private keys that no one knows the password to, making them inaccessible. Why would you do it? Well, there are plenty of reasons!

Just – keep in mind that even though it may bring you some benefits, it can also have other implications that may not be in the best interest of you and your customers. And, as burning your digital assets is not something you can simply reverse, be very careful with what you are throwing away. Cryptocurrency burning is a great way of getting rid of remaining tokens, but if they suddenly rise in value – then you have a problem.

Value Appreciation

Like in the case of regular currencies, less means better, so the more scarce the currency is, the more people are searching for it and willing to pay more. Of course, it can only be applied to some existing currencies. If you print out your own Home Dollar in several ones, then no one would care. It’s the simple supply and demand idea that governs the traditional world. If you have a popular token, removing some of it only makes it appreciated. Of course, you cannot do it constantly, as there is this sweet point where people will just stop buying your tokens. So – tread carefully.

Deflation

Another reason you would be interested in decreasing the number of your coins is to create a deflationary mechanism to help you fight inflation. If the supply decreases, you can take some money out of circulation to create a demand that will increase the price.

DeFi Projects

Another reason why people are burning cryptocurrency tokens is – the DeFi projects. Decentralized finance are all the ideas within the crypto world . Those would be cryptocurrencies, NFTs, or blockchains that support various ideas within the community. Here is why you would want to burn crypto if you would like to use it for DeFi projects.

Scarcity

Getting money out of your crypto wallet may not be something that you are happy about, but – if it’s part of a greater investing strategy, then you may be looking for some guaranteed win. The scarcer an asset is, the more demand it can bring to the table, and it can be great for the DeFi project as a whole.

Of course, as we have mentioned before, it does not work if no one knows you, but if you have some following, you may just be on the right track to something great. For example, the digital artist Pak created an “NFT burning platform” where artists can burn their own projects. As Maghan McDowell from Vogue Business states:

“In exchange, they receive some of the platform’s digital currency, called Ash (depending on the item’s price and the number of that item available). In the future, Pak will only accept Ash for payment, and other artists can also choose to accept Ash.”

Community Engagement

You would want your “token burn activity” to stay public for several reasons. If people see what you are doing, there is a chance that they will get interested in the project as a whole, thus – making it more widespread. This way, you will gain a lot of money in the process. If you want to accomplish this task, just create hype and tell your followers that you will suddenly drop the number of tokens from 100,000 to 50,000. And – wait for the reaction.

New Technology

Token burning may not only be in connection with inflation or just trying to appreciate the value of your coins. Like in the case of PEPE Memecoin,  which hit the headlines for some time after burning its coins.

“The Pepe memecoin (PEPE) bucked the trend of bitcoin (BTC) dominance over the past 24 hours, rising by 31% following a 6.9 trillion ($5.5 million) token burn. (...) The popular frog-themed memecoin is trading at a two-month high as the burn quells concerns over the team's token holdings. The team now holds 3.79 trillion tokens ($3.72 million), which would have minimal impact if sold on the open market as 24-hour trading volume has surged to $397 million, according to CoinMarketCap.”

But not all stories end up with something like that. Sometimes, it’s connected to technical issues and transitioning to a new standard. Ethereum is a great example of that. ERC-4337 token standard for Ethereum introduced advanced smart contracts.

Advanced Security

This is one of the reasons why you would want to create a new standard when it comes to improved security features. Sometimes, burning crypto may increase the security of the whole network. It’s a consensus mechanism; the fewer coins you need to protect, the greater your chance of having a safe connection.

Interoperability

New standards can also be necessary for interoperability with other projects. That was the case with Icon tokens in 2018 . The project burned 50% of the total supply of ICX tokens to enhance its ecosystem's stability and value proposition.

New Regulations

Sometimes, companies need to burn tokens due to new blockchain regulations or to ensure compliance with new regulations. New tokens are coming up daily, so keeping an eye on them is crucial for every project. That’s why it is sometimes necessary to burn a crypto project, or at least some portion, to ensure it’s within the legal standard. For example, with new regulations right around the corner, we can imagine a situation where a new standard for coins would create a cap on the value or the number of coins available for sale in a particular market.

If you do not comply, that would seriously influence your token distribution. The burning mechanism is then great for decreasing the particular number of tokens in circulation to validate yourself as a law-abiding company in the eyes of the government.

Symbolic Gesture

Burning your crypto can also be a symbolic gesture for making people talk. It can have various meanings, from something pretty straightforward to being an encoded message. One of the greatest examples of that is the first Bitcoin block ever mined, the Genesis Block, and the base for all the future endeavors of the entire crypto world .

“The Genesis Block is also known as Block 0 or Block 1 and is still in the Bitcoin network, where it will remain as long as a computer is running the Bitcoin software. All nodes in the Bitcoin network can consult it, even if it is at the other end of the network with hundreds of thousands of blocks. (...) In the case of the Genesis Block, only one person knew about Bitcoin to mine it: the creator of the first cryptocurrency, Satoshi Nakamoto. Satoshi (almost certainly a pseudonym) mined the Genesis Block on January 3, 2009, three months after having published the Bitcoin white paper on an online crypto forum. And now, people call January 3rd “Genesis Block Day” or "Bitcoin Genesis Day."

This is probably one of the first instances of burning crypto in a symbolic gesture, meaning – sending it to an address that no one can retrieve it from. This attempt creates a whole new area of cryptocurrencies, so it’s only more impressive when you think that 50 Bitcoins were sent there. It’s over 2 million dollars worth of tokens.

Trust the Process

Sometimes, it can also symbolize that you trust the crypto world and the balance that it brings to the economy. Every penny counts, so getting rid of a large sum may show the people wondering whether to invest in crypto that those transactions have meaning and should be taken seriously.

Community Burning

Sometimes, the tokens are burned for the sake of community members to show them respect and say that their effort is appreciated. With each burn, the total number of coins decreases, so the miners, traders, or any other method of protocol access will all profit significantly from each burn. Of course, getting rid of your available supply will surely result in simply having no push in the market. Sometimes, burning tokens can have the opposite effect. Token holders may find themselves in a situation where the token supply is so low that everyone just resigns from using it altogether. So, you need to be careful with the circulating supply.

High stakes and high rewards – this is the crypto game these days. All the networks are doing their best to make the most out of every transaction. Whether this would mean investing in token protocols or burning it to the ground – those tactics are not random. Sometimes, they mean maintaining the users; sometimes, it’s suitable for mining; sometimes, you just want to create a scarcity model for your coins and profit from it. There are plenty of reasons, but one question remains…

So, now that we are all safe and sound, let’s talk about ways to safely acquire some coins! There are plenty of ways to accomplish that task, but there is no better, more secure, and more anonymous than Crypto Vouchers at RoyalCDKeys . With those, you can quickly get your coins with no issues, no flagging your account with crypto-related activity, only the quality product itself.

How does it work? Well, it simply adds the number of coins you want to buy as a gift card that you can redeem in your digital wallet. You can keep it or transfer those coins any time you like.

But why would I do that? – you may ask. Well, in this day and age, it seems to be that everything is getting more and more advanced; we are having less and less privacy. So, if you want to keep your investments anonymous for various reasons, getting a Crypto Voucher is the best way to do so. The operation on RoyalCDKeys will only be flagged as a gift card purchase, and in no way, shape, or form will it be connected to the crypto world. Let’s see how you can get your digital currency with no problems.

Getting a Crypto Gift Card Step-by-Step

• Create or log in to your RoyalCDKeys account;

• Buy a Crypto Voucher for the coin of your choosing;

• Next, go to Cryptovoucher.io ;

• Click “Redeem”;

• Enter the code you have just purchased;

• The number of coins you are gifted will be transferred to your cryptocurrency wallet or the gift recipient.

You must only remember to redeem this gift card within 180 days, as it will not be in use anymore after that. Just make sure that market timing is right.