Do we need to Burn STEEM ?
I hope most of you have seen the newly proposed idea for the growth of STEEM, "Burn STEEM" by now. It's not new actually, only got viral just now. In one of the recent contests of the Engagement Challenge held by Steemit Pakistan, an author proposed the idea of burning STEEM coins. Curator01 showed a positive response by leaving a comment in which he also mentioned how it can be done.
Assuming, that most of you don't know about coin burning and its benefits, I thought to share my little knowledge on the topic. I hope this explanation will help you understand it and also help you in weighing the pros and cons.
What is coin burning in the crypto world?
In simple words, it is disappearing/removing a coin permanently from circulation to reduce its supply.
Why coins are burned?
We know that value of a commodity is determined by its demand and supply. Any commodity which has a low supply but high demand becomes valuable - its worth increases.
To put it more simple for my Pakistani friends,
"Remember, last year tomatoes weren’t imported to Pakistan due to conflicts with the neighboring country India. This drastically reduced the supply. Whereas, we know tomatoes are used in almost every Pakistani dish making them high in demand. Therefore, when the supply of tomatoes decreased and the demand increased, their rates went up as high as 400 Rupees/kg which are normally sold at the rate as low as 30 Rupees/Kg."
Let’s say the tomato import got burnt that’s why couldn’t reach Pakistan.
We all didn't want expensive tomatoes but we want our STEEMs to be valuable for sure.
Now if we burn the STEEM and as a result reduce its supply then its price can go up too like those tomatoes.
How can STEEM be burned?
There's a special account on Steemit with the username @null. It's like a black hole, whatever goes there, never comes back. No one controls that account; whatever you send there is gone forever. So if you send your STEEM or SBDs to that account then you are actually removing your coins from the circulation. Those coins won't be used in any future trades. In crypto terms, you have burned those coins.
What's the difference between vesting and burning a coin? How is burning different from power-ups?
When we transfer STEEM to vesting ( do power-up) then we are locking our STEEM temporarily. This also reduces the supply as that STEEM is no longer in circulation. However, we can withdraw it whenever we want and sell it even worse.
Whereas, when we burn a coin, it cannot be withdrawn. In other words, it gets locked and is permanently out of circulation.
Should we "burn" our STEEM/SBDs?
I know many users still do not accept clubs but the scarcity of rewards forced them to join those. Therefore in the present circumstances, "burning" seems like next-level sh*t and naturally, nobody would want to part ways with their precious coins.
But the truth is, if we keep thinking only about the immediate benefits/ rewards, STEEM will never go up.
On one hand, we all want the price to go up but on the other hand, we don't want to play our role and want it magically to go up.
It doesn't work like that. Steemit is not an easy money platform. As long as we have people of this mentality here, STEEM will always suffer.
To have a better STEEM future, it appears that burning is a very sound solution.
What are the rewards for burning?
curator01 has mentioned that he will vote for posts that are configured to set 25% beneficiary to @null. To make your posts easily found by the curators, use the #burnsteem25 tag in your post.
However, this should not be your only reason to do the burning. Think beyond the curator votes and focus on the long-term effects that will have on STEEM.
I hope authors won't compromise on the quality of their posts just to earn some extra votes. I also request the authors to avoid abusing the tag. Use it only when you set 25% beneficiary to @null on a good voteable post.
Keep in mind that this will not guarantee you any votes. You are not doing any favor to the curator by clubbing(power-ups) and burning, you are doing it for the future of STEEM.
Post Promotion
You can also promote your posts and burn SBDs at the same time by directly transferring SBDs to @null and typing the author's username/permlink in the memo. The promoted posts appear on this page - https://steemit.com/promoted.
You can read more details about Post Promotion here.
I tried to write this post with the simplest explanation so that the burning concept can be easily understood by everyone.
Yes, burning steem would be a great idea to increase the steem worth for sure.
Although it might be a bit challenging for so many users to burn 25% of their earnings, because it ain't a small percentage afterall. But we all wouldn't hesitate to do it if it increases STEEM worth.
You explained it so well. Especially that tomato example, you always come down to our level to explain us things :)
I will definitely set 25% beneficiary to @null and use tag #burnsteem25 in my next post!
Huge credit goes to @steemit-pak for coming up with this topic in engagement challenge and bringing this OG 'Burn Steem' idea to us!
When I write a post, I keep in mind my readers. I assume that there is a reader who doesn't know anything. Therefore, I always end up writing in very simple language with that thought in mind. 😀
It's good that you want to take part in the "Burn" initiative. 🙂
Impressive explanation with the example of tomatoes import issues happened last year in Pakistan.
Haha I couldn't think of a simpler example.
You have published an among post. Thank you so much for sharing with us.
Let's keep moving forward.
Will follow your points in my upcoming posts.
Good to know that.
Thank you for such an informative post.
You're welcome.
Anything for the value of steem to go up
We should be able to sacrifice
Message to does that don't comply to the idea
I totally agree. We must do things out of conviction.
Thankyou for this post I was very confused about this.
My pleasure.
Thanks my love for accepting this proposal to burn steem. It is very easy and simple. Just as you have explained. Let's keep moving forward, we will surely get to our destinations
Users still confused about burning. I hope they understand the essence and think about the long term benefits instead of just worrying about short term rewards.
That is the point. Burning has long term benefits which users need to understand. But like the club initiative, it will take a little time but they will surely understand
You write a wounderful topic and detailed,thanks for sharing with us.
Thank you.
Here is a post I wrote the other day making the opposing case, that individuals burning Steem or SBDs is not a good idea: Controversial opinion: Maybe burning money is bad.
Thank you for updating us and it's really helpful post👍😊