What is a coin burn?

A coin burn is the process of sending cryptocurrency to a wallet which no one has access to, taking it out of circulation, and effectively “burning” it. Coin burning happens most often when someone wants to control the price inflation of a cryptocurrency.

What is cryptocurrency burning?

Cryptocurrency burning is the process in which users can remove tokens (also called coins) from circulation, which reduces the number of coins in use. The tokens are sent to a wallet address that cannot be used for transactions other than receiving the coins. The wallet is outside the network, and the tokens can no longer be used.

What is Burn and mint?

The reason it is called Burn-and-Mint is because Factom’s coin supply is not fixed and has an in-built inflation rate, meaning that new coins will be constantly created and ‘minted’.

What is a token burn event?

Basically speaking, a token burn event happens in the following order: A cryptocurrency holder will call the burn function, stating that they want to burn a nominated amount of coins. The smart contract will then verify that the person has the coins in their wallet and that the number of coins stated is valid.