According to Shibburn.com, a platform dedicated to tracking Shiba Inu's total supply, over 41% of the initial Shiba Inu (SHIB) supply has been burned by holders aiming to increase the coin’s price. The website even provides information on two "dead wallets" where users can send SHIB to contribute to the burn.
What is Coin Burning?
Coin burning refers to the process of sending cryptocurrency tokens to a wallet that lacks an access key. Without the private key, these tokens are permanently inaccessible and effectively lost forever.
Which Coins Can Be Burned?
In principle, any cryptocurrency can be burned. The decision to burn tokens typically lies with the coin’s development team, though the core community can sometimes initiate burns as well.
Burned tokens are traceable on the blockchain. They are sent to a so-called "eater address," which is publicly visible but inaccessible. As Bathija explains, “It can be done in several ways, most commonly by sending the coins to a so-called eater address. Its current balance is publicly visible on the blockchain, but access to the contents is unavailable to anyone.”
Why Burn a Coin?
Burning coins can serve several purposes. It can act as a direct incentive for investors and influence supply and demand dynamics. A major goal is to create a deflationary effect: reducing the total number of tokens in circulation makes them scarcer, which can increase their value.
Patel of Mudrex notes, “It drives the coin price higher. It makes existing investors pretty happy as the value of their investments move northwards. Miners of certain cryptocurrencies, such as Bitcoin, also benefit as the value of their rewards increases.”
Steps to Burn Shiba Inu Coins
Create a Burn Address: This is a special address designed for burning coins. It is a non-retrievable location where coins are sent for permanent removal.
Send Coins to the Burn Address: Transfer Shiba Inu coins to the burn address. This action effectively takes the coins out of circulation, making them inaccessible.
Verify the Burn Transaction: After sending the coins, verify the burn transaction on the blockchain. This step ensures that the coins are permanently removed and cannot be recovered.
By following these steps, you contribute to reducing the total supply of Shiba Inu coins, potentially boosting their value through the burn process.
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