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RE: Is burn rate an equivalent metric to profit if tokens are burned in the crypto ecosystem is this analogous to profit in a company?

in #crypto3 years ago

I guess it was a rhetorical question. Of course they are not the same, not even close. I think burning tokens is a great PR-tool. People are afraid of inflation (no wonder, most tokens are created out of thin air), so burning tokens gives them a good feeling about controlling that inflation. It is more a psychological instrument than a P/L metric.
Although there are interesting alternatives, like https://blocktivity.info/, most people still look at the market cap or the market cap dominance if they want to see in one number the success of a blockchain. E.g. BTC never burned a single token and is still no. 1.

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Yap that's a bit of what i think also, there is alot of psycological effect, and an attention caller, altough it almost certainly will have a big effect on the price on the mid/long term, so for the holders yes there might be profit, but at least i cannot calculate it :D.
Hard to answer technically, haven't followed also but i think it's burning part of the fees ? the burning in some cases might have some use, or just be burned for some reason.

In a coin like ETH which is competing with BTC pretty much, it's a way to speed up the competition, and it is alot of burning going on.

More than 27,500 eth, worth some $83 million, has been burned in the past week as ethereum closes in on $100 million eth burned.

The network is currently running at 218.46 eth burned per hour, worth some $700,000, with it burning some 4,500 eth a day, worth nearly $15 million.

BTC hasn't done this, It's going to be interesting seeing this developing specially with all the games surrounding and creating a big demand for ETH.