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bitsol

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What is burning, and how does it work?

Posted on September 4, 2014 at 3:21 PM

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• Omnibus

  

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  Burning is removing a certain coin or asset from the float of total assets in such a way that it cannot be recovered in exchange for some new asset. It effectively represents the user attributing an equal value to what is being burned as what that user is receiving in exchange for proof of burn.

  An example would be if you generate a random bitcoin private/public keypair and never write down the private key, and then tell people that if they send bitcoin to the public address, you will give them a fixed amount of another coin in relation to what they sent to that address. Once you see that theyve sent bitcoin to the address, and because you would never be able to use the coins they had sent because you do not have a record of the private key, you can send them the token you have promised which means they value that asset proportionally to the amount you sent in bitcoin.

  Posted on September 4, 2014 at 5:34 PM
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• bitsol

  

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  @omnibus Burning is removing a certain coin or asset from the float of total assets in such a way that it cannot be recovered in exchange for some new asset. It effectively represents the user attributing an equal value to what is being burned as what that user is receiving in exchange for proof of burn.

  An example would be if you generate a random bitcoin private/public keypair and never write down the private key, and then tell people that if they send bitcoin to the public address, you will give them a fixed amount of another coin in relation to what they sent to that address. Once you see that theyve sent bitcoin to the address, and because you would never be able to use the coins they had sent because you do not have a record of the private key, you can send them the token you have promised which means they value that asset proportionally to the amount you sent in bitcoin.

  Sorry, I do not really understand...

  Posted on September 4, 2014 at 5:36 PM
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• Halo

  

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  @bitsol

  @omnibus Burning is removing a certain coin or asset from the float of total assets in such a way that it cannot be recovered in exchange for some new asset. It effectively represents the user attributing an equal value to what is being burned as what that user is receiving in exchange for proof of burn.

  An example would be if you generate a random bitcoin private/public keypair and never write down the private key, and then tell people that if they send bitcoin to the public address, you will give them a fixed amount of another coin in relation to what they sent to that address. Once you see that theyve sent bitcoin to the address, and because you would never be able to use the coins they had sent because you do not have a record of the private key, you can send them the token you have promised which means they value that asset proportionally to the amount you sent in bitcoin.

  Sorry, I do not really understand...

  You could try searching google, this was the first result I got and has everything related to burning

  https://en.bitcoin.it/wiki/Proof_of_burn

  Posted on September 4, 2014 at 6:09 PM
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• SilverBullet

  

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  you learn something new every day

  Posted on September 5, 2014 at 5:02 PM
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• Demeter

  

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  @bitsol

  Burning is simply sending a coin/token like LTBc to an unusable address on purpose so that they can no longer be used. It reduces supply and, theoretically, increases value of coins/tokens that remain in regular circulation.

  Posted on September 5, 2014 at 8:12 PM
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• bitsol

  

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  Thanks guys

  Posted on September 9, 2014 at 10:51 AM
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