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Burning crypto involves miners or developers removing cryptocurrency tokens from circulation. The tokens are sent to a crypto wallet that has no private key, and with no private key, there’s no way the wallet can be accessed. As a result, the tokens are lost forever. The concept of the crypto being permanently taken out of circulation is what started the term “burning crypto.” Many cryptocurrencies practice this method to protect their value—when the coins are burned, there are fewer in circulation and the crypto becomes more valuable.
Many tokens do not have a supply cap, meaning that their supply could just keep increasing. However, when there are too many tokens of a cryptocurrency on the market, that crypto can dramatically lose its value. Because the tokens are sent to a wallet address, the burning of tokens can be verified on the blockchain, allowing developers and users to keep track of how many tokens have been burned.
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