The crypto investor and economist, Dr. Craig S. Wright talks pure crypto-technical language as he discusses two major concepts behind the entire concept of cryptos. He ponders over the fallacy as per which people take ‘burning’ cryptos as a major use. Dr. Craig negates the sentiment that this is anywhere near the practical use of the cryptos as we know them. He then turns swiftly towards a whole new concept that a certain ‘velocity’ measure is required to add up the value of the cryptos one way or another. According to Dr. Craig S. Wright, the velocity of the coin should be at the level where the value adds up not the other way round. Burning the coins as a matter of fact reduces the velocity of the coin, eventually the coin running out of the value content. BlockPublisher was sharp enough to plunge into the mix to extract some words from the man himself.
People wrongly take burning coins as the pivotal use. Burning the coins does not yield any good rather it reduces velocity. A reduced velocity results in a much weaker, less valued coin.
Dr. Craig set his sights over the two crypto parameters that hold the trend and the pace with which the certain coin treads towards prosperity. Burning of a coin can be done for various purposes which include disposing off the excess coins after an ICO or merely the waste that is left off. Burning actually is the process of placing the coins at an unattainable address in the blockchain where no one can access the content inside but the fact remains intact that the transaction bits can be viewed at every node of the blockchain. Burning is also performed so as to offer incentives to the token or coin holders and to execute the proof of burning protocol measures. Dr. Craig disregards this as the practical use of cryptos as what it actually does is getting rid of the coins or simply setting coins where no one can reach them. This rings true as the cryptos are branded as the democratic money or the money of the public.
Then Dr. Craig strolls towards the chain reaction that burning leads to which is reducing the velocity of the coin. Velocity of a coin is the prime parameter which decides the worth of the coin measuring its value. The reduced velocity tracks to resulting in a much lesser value. But the icing on top is that the process of burning reduces velocity in the first place. Thus the transitive property holds true in the case as we can pile up the factors to eventually lead up the effect of burning that can reduce the value of the coin.