Steemit Crypto Academy Contest / S5W4 - Token Burn | by : @waterjoe
Hi Steemian friends good night
I read an interesting contest theme about burning tokens from the award prizes I received with the tag settings I usually make, namely burnsteem25, so it made me very interested in participating in writing
Token burn is the burning of currency to limit its circulation in the crypto market. The supply of supply is limited so that demand will continue to occur and in an effort to increase the price of cryptocurrencies
The first illustration is an example, a red chili farmer who plants simultaneously in a very large area. When all farmers' gardens carry out harvests simultaneously, it certainly produces thousands of tons of fresh chilies. This very abundant production exceeds to meet the needs of its residents so that the selling price of red chili drops drastically. Residents began to store a lot of red chilies in their kitchens so that demand began to decline as a result many red chilies were no longer sold and began to rot in the farmers' warehouses.
Beginning farmers experience losses due to the large number of stocks that exceed market demand. At the beginning, before the harvest occurred in the market, red chili was still scarce, so that there was a lot of consumer demand, even though the price was expensive, but residents still bought it. To control prices so that they remain stable, careful calculations must be made to estimate how many tons of red chili residents need. Entering the red chili planting season, it also uses a large area of the garden which can be sufficient to meet market demand
Other items as a second illustration can be seen from the types of stones that are around us. Stones that are very rare to find are of course gemstones such as diamonds if the price is definitely very expensive. The selling value can reach hundreds of millions of rupiah, the more rare and difficult it is to get certain types of stone, the price with its selling value is very fantastic soaring. Other stones are easy to get in large quantities, so the price is cheap. Having a high selling value, rare objects become unique and expensive valuables
List the benefits of token burning with a detailed explanation of each
| Burmsteem25 | Deliberate burning of 25% of the steem currency to limit the supply so that 25% of steem can no longer be used to zero and will be renewed again |
|---|---|
| Impact | Steem supply dwindling |
| Counting | Economically, there will be a shortage of supply so it will be scarce so the demand for Steem currency will increase |
| Positive side | Steem currency prices are getting high |
| Income | Investors become profitable and will not lose by burning steem, otherwise the steem investment will increase |
Why does blockchain burn its tokens? The blockchain burns its token by identifying the results obtained.
The process of burning steem is a unique way run in blockchain companies to withdraw the amount of circulating steem currency.
For price stability in the market to be guaranteed, it is important to keep the supply of Steem tokens circulating in the crypto market reduced by burning 25%. Existing circulation is only with a supply stock in the market of 75% and will never reach 100% value, this is to maintain demand so that the token price goes up. The figure of 75% illustrates the need for Steem tokens that are still there and never enough. The 75% limit value which states that another 25% has not been fulfilled will affect the price of the token sale itself, as a result there will be demand to fill the supply of tokens that are lacking. The burning of 25% steem tokens results in a permanently empty ring reading of 25% so that there is an ongoing market demand to fulfill this deficiency. The price will drop when the stock of tokens on the market exceeds the threshold or if there is too much supply of tokens circulating, the price of Steem will fall
The burmsteem25 company that drives burning 25% of my publishing revenue?
I think this will help increase the value of the steem currency in the medium term because the supply of crypto tokens is still not full by 25%. Market demand will always be there to make the value of the Steem currency go up. Limit supply so that demand continues to meet demand that is still empty, which is 25%
Conclusion
If the supply of steem currency in the crypto market is rare, it certainly makes the price of steem go up
If the supply of steem currency in the crypto market matches the demand, the price will be stable
The supply of steem currency in the market is too much in circulation, resulting in a drastic drop in prices
That's what I wrote in an effort to enter a contest with the theme Token Burn organized by @crypto-academy
| Special greetings to all my Steemian friends |
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| About me 👉@waterjoe |
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Hi @waterjoe
The burning of STEEM is a very important system that may not have been used to its maximum potential, but with the collaboration of many, it could cause real effects on the price of the currency.
I really liked the analogy you made with chili producers. Cool.
This can help many to understand more clearly the process of burning STEEM.
Good post!
Precisely in relation to this (burning), please, allow me to take an opportunity to invite you to an interesting initiative aiming to PROMOTE STEEM blockchain:
https://steemit.com/hive-175254/@crypto.piotr/help-steemit-grow-my-personal-suggestion-on-how-to-bring-more-demand-for-steem-join-discussion
Perhaps this publication is of interest to you.
Big thanks.
Thank you very much for the support and the information shared with me :)
Best regards from me @waterjoe
Have a great day.
Hello dear,
The main purpose behind the Token Burn is to reduce the circulating supply of a token by sending it to the dead and null wallets addresses.
You have made a very nice explanation of the whole mechanism and I really liked your way to present the post.
For the burning purpose, the given amount is sent to the dead wallet that only has the public key to receive the funds and not the private key to access it. Thus, the coins are permanently locked up.
Thanks a lot for sharing your precious post. I wish you a very good luck for the contest.
You're welcome, .. :)
You have illustrated token burning with detailed illustrations and the most crucial part of it is to drive token value retention and also retain investors' enthusiasm for the project.
Thank you so much for giving a good comment
Greetings my friend, very good information and the examples you used as the cultivation of chile tojos to cover the burning of tokens, provides added value for all new to this topic. Best of luck.
Thank you buddy for this very nice comment and I enjoyed reading it
Greetings from me
You have demonstrated token burn with clear illustrations and the most essential part of token burn is the drive token value retention and maintain investors' confidence in the project as well as the new project.
I agree with the phrase "maintaining investor confidence". The burning of Steem makes the currency price continue to hold its position in the medium term even in the long term when investors start looking to buy the steem currency, the possibility of selling it will continue to skyrocket. Thank you friend for this nice comment :)
Thank you for the engagement. The introduction of the burn function in blockchain cannot be overemphasized as this brings more token value to the blockchain as well as a stronger investment drive.
You have discussed Burn Token in detail with a nice example. The example of Jhal farmer in your area was very good. I think as well as Burn Steam. We should increase the use of Steem in our daily life.
Thank you for giving a very good comment and I agree to the use of crypto currency :)
What a very good explanation with very easy to understand illustrations of the market.
society in general is still taboo about the crypto market so with the general market analogy it will be very easy to understand
Thank you very much for giving a good comment, yes of course I will give an illustration that is easy for all of our citizens to understand :)
Nice review of token burning. I hope u always writing quality posts.
Thank you so much for the nice comment :)
Burning of tokens is not the sole factor that determines price and therefore we can't say that burn25 will guarantee price stablisation but is likely to have some role over long term. It won't be as effective as burn function in other tokens where supply is limited beciase of unlimited supply of steem .
Good luck
Thank you so much for giving a nice comment.. :)
Token burn is a mechanism used in the crypto space to reduce the supply of the asset in the market in order to have balanced supply-demand that will help to keep the value of the asset in check.
I also agree that burnsteem25 has been useful to maintain the price of Steem because it reduces the amount of Steem tokens that enters the market so that more excesses are not created to the circulating supply..
Thank you for giving such a great comment :)