Wednesday, June 16, 2021
Ethereum Burning Crypto Explained As Trillions of Shiba Inu Coins Vanished by Ethereum...

Burning Crypto Explained As Trillions of Shiba Inu Coins Vanished by Ethereum Co-founder

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Vitalik Buterin, co-founder of the Ethereum blockchain technology and cryptocurrency, has burned 410 trillion Shiba Inu tokens.

The billionaire Canadian-Russian programmer had been gifted more than half of all Shiba Inu tokens in existence by the anonymous Shiba Inu founder known as Ryoshi, in what Coindesk said appeared to be a marketing stunt.

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Buterin has since made headlines by giving away huge amounts of the cryptocurrency. Last week he donated more than 50 trillion Shiba Inu tokens—at the time worth around $1 billion—to a COVID-19 relief fund in India.

Now, Buterin has also burned a further 410 trillion of his Shiba Inu tokens—worth around $6.5 billion at the time of writing—taking them out of circulation. The transaction, made on Sunday, can be viewed on Etherscan, which keeps track of Ethereum transactions.

In a note attached to another transaction he had made, Buterin said he had decided to burn 90 percent of his total Shiba Inu portfolio and send the other 10 percent to a charity he had not yet decided upon, according to Coindesk.

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Shiba Inu is a meme cryptocurrency that describes itself as a competitor to Dogecoin, though it is currently worth a lot less. Shiba Inu tokens were priced around $0.000016 each at the time of writing, according to CoinMarketCap.

What does burning crypto mean?

In the world of cryptocurrency, “burning” a token means to purposefully take that token out of circulation, often by sending it to a cryptocurrency wallet to which no-one has access.

Burning large amounts of cryptocurrency tokens can have the effect of increasing the scarcity of that token. As such, burning can be used as a way of controlling inflation.

It is similar to stock repurchasing in the world of traditional finance, whereby companies purchase shares of their own common stock to increase the scarcity, and potentially the value, of shares already held by investors.

In a transaction note, Buterin urged other coin developers not to send him any more tokens unless he consented first, and recommended contacting a charity instead. He said in the note, according to The New Zealand Herald: “I don’t want to be a locus of power of that kind.”

Cryptocurrency tokens are notorious for their volatile price swings. The price of Shiba Inu plummeted after Buterin’s transfer to the India COVID-Crypto Relief Fund last Wednesday.

The value of all Shiba Inu tokens in circulation is around $6.3 billion, according to CoinMarketCap.

Experts have previously warned Newsweek about the risks associated with cryptocurrency investing.

Adrian Zduńczyk, co-founder of blockchain analysis group YellowBlock and CEO of The Birb Nest crypto educational platform, last week warned about an increase in “over-hyped coins” and “high returns expectations.”

Vitalik Buterin, co-founder of Ethereum, at TechCrunch Disrupt London, 2015. The young billionaire has burned trillions of Shiba Inu tokens.
John Phillips/Getty

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