Why Burning Shitcoins Does Nothing For Price
Its always interesting to listen to shitcoiner narratives, and how they justify holding on to a token, they often take bitcoin concepts and try to appropriate them as their own, one of those is the scarcity of a bitcoin.
Bitcoin only has 21 million coins, it's the ability to enforce network rules, its ability to force creation through proof of work, its the ability to limit centralisation of supply due to the cost acquisition of the coin creates a bustling ecosystem where the number go up can thrive.
Shitcoins don't have that, most if not all have premines and prefferential access, most of them require no energy to produce and when something takes no energy to produce, it can be created adnausiam.
We're burning tokens
One of the most popular fantasy land stories is the idea of burning supply, oh we're going to use fees to burn supply, oh you need to burn supply to access this feature. Oh if you pull out of this ponzi early we're going to slash your rewards and burn the supply.
The theory goes as supply is burned, there will be less coins and from the buy wall you have today, it should re-adjust upward.
What they don't tell you is that the burning is such a marginal part of it, the inflation created makes it negligible. This is the reality in most cases.
In the case of a mass burn or where a coin can achieve some sort of scale in their burning that outpaces inflation creation of new coins. The fact that the float on the market doesn't change much and the buy order demand doesn't increase means even if you cut your token supply by 99% it wouldn't make a lick of a difference.
Removing supply means nothing
If the supply of coins actually meant something, then forks of bitcoin would all be outcompeting most shitcoins because they also have 21 million coins. Bitcoin cash, and Bitcoin Satoshi's vision are absolute jokes, their supply and issuance don't matter.
What matters is people wanting to acquire it due to the incentives of the network, that is the primary driver, the more people want something, and the fewer willing to part with the benefits of owning something, the more it has to get bid up to acquire.
This is what shitcoins don't tell you, they rely on your ignorance of economics to fool you into holding their coin so you provide exit liquidity.
Creating less sellers because you can't create more buyers
The truth is shitcoin founders and bag holders, or rather the ones that do have any honesty and understanding of their system realise that they cannot attract buyers of their coin at any real scale. So instead of going out to try and compete with bitcoin for buyers, they lure those in and encourage them to hodl, to stake, to lock up their coins, and earn fees on paper.
All the while selling their coin to you and dripping out of their own positions and leaving you in a coin that has no real liquidty to realise any gains you might achieve on paper.
I've come to realise that shitcoins are like financial fairy tales for adults, and sure they sound great, but in reality, it's only a story.
Eventually you all have to grow up.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, "I am a Jessie."
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Would you say that the value of a token is derived more by it's scarcity, it's network effects or some other variable?
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I would say scarcity is a small part of the equation, it's about demand for the float, in bitcoin you see miners only selling when they have to, they want to hold on to the value they created long term as it can increase their profits, so a fraction of the coins are brought online to exchanges each day along with traders buying and selling. But there's always a constant demand for the supply as hodlers take it off the market.
Now with these other coins, they don't have that, all the central issuers want to dump their coin, they see no reason to keep it, so to account for the lack of buyers, they come up with all sorts of gimmicks like staking rewards, lock-up periods and a bunch of other penalties
Look at BNB they're constantly issuing and burning their token, it's almost like on-chain wash trading, contracting and expanding the supply because they've hit peak demand for their shitcoin.
I can see that on the miners in a bull market. Right now I know of miners who are selling their full rewards as soon as it hits to make sure they have fiat gains. It doesn't make sense to me but I guess they assume they'll be able to buy back in cheaper from here.
I have to fully agree that burning has no value to tokens. I made this mistake with SPORTS when we rolled out a program to pay people to burn. It might have encouraged more to get burnt but it never created a net burn or a culture towards more burns. It just left a new net inflation supporting the rewards for it.
I think it depends on the miner, most large miners can borrow against their holdings to have fiat to pay bills and hold on longer to try and public miners can always sell equity to add more runway or take out debt
Home miners may sell to cover bills, but even at this current price of 29k the average cost to mine a bitcoin is 15-18k if you're not making a profit your set up is jacked or your electricty is too expensive, you can use it as a loss leader if you're a long term hodlr looking for non-kyc sats but if you're looking to be a miner/trader, id say shut it down
I am not one for tokenomics really, I think it's all leveraged bets on bitcoins price movements and capital flows and ive yet to be proven wrong
Compelling arguments.
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For sure true in most cases.
Unless a real use case is created. With Polycub I am not sure yet. It fulfills some of your points, but too early to tell.
Use case is such a played out term, does doge have a use case? No but it’s 5x the market cap of so called “serious” projects because use case means nothing
It’s all marketing gimmicks, jargon and double speak to get you to hold on to something longer while they dump into the liquidity you provide
will there be no successful projects on crypto/shitcoins then? is usecase really 0?
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No anything built on the fact that it needs to control its monetary units will always focus on accounting trickery than build a solid project/service people want.
Bitcoin's already there, just build whatever you want and use it as the unit of account. You don't have to believe me, but you can't point to anything that if it disappeared tomorrow anyone would miss apart from bitcoin
More Developers are working on ETH?
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How do you interpret that as a bullish signal? All I see is developer bloat, making it more costly to keep the network going, I see it as poor engineering and that graph is also misleading
Bitcoin has 3 versions of lightning being worked on, countless wallets, the most liquidity, the most on rando and off ramps
The most secure network so you don’t need a lot of dev work on the base chain because it’s near ossified most dev work is done on applications leveraging bitcoin not bitcoin itself
I was just seeing that there are many devs working on ETH but not so many on Bitcoin. But good points.
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I want to be honest. I' ve got only altcoins( i know, for you shitcoins), the reason is because i entered in cryptos last April on Bitcoin's ATH. Iam sure for bitcoin's value but i believe several projects will succeed! When i heard a network starting a burning, ia a red flag for me, and i try to empty my pockets from that cryptos! Your phrase " when you can create more buyers, create less sellers", includes all the pathogenesis of this tactic!
Ps: show me some mercy, i know you are a raw btc maxi! 😂
Make your bets, who knows? Some might pay off for you and if you feel its worth the risk. I just know it's not worth the risk for me, I am no trader, I can't tell you tops and bottoms and when to get in and out, that's not a skill I have nor want. I just want to be able to save, I don't want to gamble I don't want to chase yield I just want to put money away and not think of it for years while I work.
I am happy to work, I work hard, I just want to know my hard work will be there when I need it when I am old and cannot work as hard
Lol it's your money, its YOUR hard work you put in to earn it, I have no say in what you do with your money.
I am not trying to sell you on Bitcoin, in fact it benefits me when people don't buy it because I can buy it cheaper. I am just showing you my take on the risks in that market you choose to put your faith in
No hard feelings my friend. Its nice to have different point of view! What i appreciate the most on you, is your honest and stable opinion!
Dear @chekohler, we need your help!
The Hivebuzz proposal already got an important support from the community. However, it lost its funding few days ago and only needs a few more HP to get funded again.
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Your support would be really helpful and you could make the difference! Thank you!
Shitcoiners gon shit!
Lol I should make that into the Meme with the llama turning it’s head.
Burning 1 million shitcoins on a coin that’s got a trillion supply doesn’t make much of a dent but it’s about optics. They are trying to improve optics to get more bag holders.
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Lol as long as you don't dig too deep, just listen to our PR releases don't actually do the math, stay bullish while we secure bitcoin or stablecoins with your buy orders for our shitcoin