250,000 Ethereum coins have just recently been burned, with more on their way! What happens to the coins when they are burned? Does Ethereum have the same burning process as other coins?
250,000 $ETH Burned
A certain JRNY Crypto Twitter account announced that a total of 250,000 $ETH was being burned and that more was still being burned as well. To this Tweet, a curious account then asked a question.
A certain Jomo on Twitter replied to the tweet, asking where do the "burned coins" go and if there is actually a physical fire pit where they can be visited. To this, another user kingdave.eth replied, noting that normally, tokens are sent to addresses that are reportedly inaccessible in order to burn them.
$ETH Burning is Different
Kingdave.eth, however, shared an article noting that $ETH burning is different in that the protocol actually permanently removes them. An article by TheBlock Crypto shared how to burn cryptocurrency and will it continue at the current rate.
It was noted that although burning sounds like a dramatic term, it only means removing the coin from circulation. In order to burn crypto, it is usually sent to an address that nobody has control over. As of the moment, there has been a lot of comparison between $SOL and $ETH.
Ethereum Destroyed by the Protocol
When it comes to Ethereum, however, tokens are actually being destroyed by the protocol. This means that they no longer exist on the network. MyCrypto developer Luit Hollander noted that this happens by removing the $ETH from the person that is making the transaction but not giving it to a miner.
Unlike transaction fees that are paid to miners, as a result, nobody can spend it on the network from that time moving forward. As of the moment, the network has been burning $ETH at a high rate, however, this won't necessarily continue. With NFT games like "Axie Infinity" getting massive attention, other NFT games built on the Ethereum platform are also being watched as well.
Will Ethereum Continue to Burn?
The Block explains that the upgrade enables the network to be able to adapt to moments of higher demand. This is so that when there are additional transactions, there is a higher base fee(the part allocated to get burned), and more $ETH gets burned. Once the network goes quiet, however, less $ETH gets burned.
As of the moment, it was noted that the network is processing all of the transactions in the current backlog, which is a pre-blockchain limbo that is called the mempool. Once the transactions have finally been processed, there will then be a lower demand, and the base fee will most likely drop.
Pseudonymous security researcher Hasu wrote not to expect the current burn rate to continue forever. It was noted that once the mempool has finally been cleared out entirely, the blocks will then become smaller, and the base fee will yet again fall.
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Written by Urian B.