Everything You Need To Know About Coin Burning

Time is changing and so is technology. There is always something better being developed to match the requirements of today. When we look at the financial sector, the one trend that has caused havoc to previous instruments of investment in cryptocurrency. It has brought about diverse portfolio options from high to low-risk crypto coins that offer high yields. One thing is for sure, that people are interested to buy cryptocurrency. Its soaring prices and innovation demonstrate its growing popularity.  

However, understanding them can be hard, due to new and advanced technology use. When we talk about crypto, a recent terminology that has been making noise is coin burning. Now, what is coin burning and why is it done? If you are interested in knowing more about it, then we have prepared a guide to help you understand all aspects of coin burning. 

What exactly does corn burning mean?

Coin burning is the process of putting a certain amount of coins into a digital wallet that has no key. Thus, removing it from the supply chain in the market. The wallet acts like a black hole for digital currency as they have no key, which means that no one can ever retrieve them. It is done to make the currencies more scarce and to increase their market value. There are two types of coin burning, that are

  • Protocol-based

The first method, known as protocol level mechanism is when the coin burning feature has been hardwired into the technology of the crypto. It means that the coin will start burning after reaching a certain date or value that has been already set in its DNA. 

  • Economics based

The second method works on the laws of economics. A part of the crypto transactions is burned after receiving payment against the activities performed on the network. 

Why do projects opt for coin burning?

  1. To maintain supply and demand

The crypto coins are using the law of economics that suggests that limited supply will lead to an increase in the demand and value of the currency. As more coins are burned, it might eventually lead to soaring prices of the limited tokens. 

  1. Decreasing the chance of spam transactions

The use of coin burning acts as a protection against distributed denial of service (DDOS) and reduces congestion on the network. This ultimately helps in lowering the risk of spam attacks and providing space for secure transactions. 

  1. For longevity

If we look at any crypto coins, the main goal is for prices to increase and to capture a significant share in the global market. Coin burning acts as a way of showing commitment to the aim of the digital coin and makes investors trust these currencies more. 

Crypto’s that use coin burning

Numerous upcoming and established crypto coins have started burning their coins.  The two most popular ones are –

  • Ripple 

The crypto in the top 10 list has integrated coin burning in its transaction methodology. It means that every time a transaction happens, a small amount of the coin is burned. However, only 0.00001 Ripple is decreased every time. Since the fraction is very small it will take years to actually have an impact.

  • Binance coin 

The Binance Coin is the token for Binance exchange, a top-three cryptocurrency. It is used for transactions for buying and selling various crypto coins. It has continuously undergone various coin burning. In the current year, it burned an amount equal to $165,791,000. Additionally, the crypto plans to burn 50% of the original market supply in circulation. 


It is always better to understand the crypto market and its features before investing in them. This would help in making safer investments and reducing the risk. To buy or sell cryptos the most secure way is to choose a digital currency wallet in India that is trustworthy and reliable such as Wazirx. It helps in promoting safe trading and is easy to use. 

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