One of the main properties of bitcoin, as well as several other cryptocurrencies, is its final limited amount, which cannot be increased in any way. However, according to current calculations, we will not reach the known 21 million, which is the final number of bitcoins, until 2140, and at the same time it is very unlikely that its network will not undergo major changes by then.
However, not all cryptocurrencies work on this principle, quite the opposite. Of the top ten largest cryptocurrencies, only 4 cryptocurrencies have the final limited coin supply, namely Bitcoin, Binance Coin, Cardano and XRP.
These cryptocurrencies are mainly limited by a deflationary measure, which aims to maintain the value of coins over a longer period by limiting the overall potential supply of coins on the market and making them “scarcer” in the long run.
However, it should be noted that each of these tokens operates on a different principle and the limited supply thus has little in common with the Proof-of-Work and Proof-of-Stake protocols on which these cryptocurrents are based, with the exception of XRP.
It is possible to limit the supply of coins so that the remaining tokens on the market become “rarer” in another way – by burning them. If you imagine a process similar to burning banknotes under this term, we may surprise you by not being so far from the truth. However, burning cryptocurrencies is not as simple and in many cases, as in the still fresh case of Terra cryptocurrency and its stablecoin UST, was one of the main causes of cryptocurrency.
How to “lock” millions in a cryptocurrency at an address no one has access to
You will find out in this article after unlocking
- How can burning coins increase the value of cryptocurrency
- Which known cryptocurrencies use it and how it works for them
- What are its risks and where do burnt cryptomens end up
- Traders made money on burning UST stablecoin
- Why coin burning sank the cryptocurrency LUNA
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