Eater Address In The Crypto Ecosystem | (#burnsteem25)
Introduction
It's another wonderful time to share a piece of an article in the community and I hope everyone is doing great today. Today, I'd like to take on the concept eater address in cryptocurrency, what it means in the crypto ecosystem and its purpose, these are some of the things I would be analyzing in this article today. Let's ride together on this.
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Overview of Cryptocurrency Burning
Cryptocurrency burning is a very popular concept in the crypto ecosystem but it became more popular on our dear Steem a few days ago when users have adopted this method in the quest to contribute to the economy and healthy state of the STEEM token. The adoption was massive and shows how determined users are committed to the Steem blockchain.
That being said, when you hear the word burning, it all sounds like there is a lighter being employed to burn the tokens into ash, lol, just kidding around but that's not the case anyway. Cryptocurrency burning is the act of removing some tokens permanently from circulation, and as such, it cannot be retrieved by anyone, I mean no one.
Cryptocurrency burning is utilized to reduce the tokens as such to make it tend towards scarcity, the basics of economics would work in this, where the supply of an asset is reduced with an increased demand, such asset becomes more valuable, this is exactly what burning cryptocurrency tend to achieve, reducing the circulating supply of the asset to create scarcity.
We can't really say much about scarcity in the crypto ecosystem at the moment until the maximum supply of some tokens is attained such that no new tokens are created. This is when the real scarcity would be achieved and the value of such crypto assets would definitely be on the very top. In short, the aim of burning in the crypto ecosystem is to reduce circulation, create more demand, and in turn, help to increase the value of the asset.
What is an Eater Address?
It's important to understand this, Eater addresses are the addresses utilized for the burning of cryptocurrency, it serves as the permanent home of the tokens and the tokens are irretrievable, as such completes the concept of the burning of tokens. Without an eater address, the burning of tokens can't be complete or else it all results in manipulation of one kind.
Eater addresses don't have private keys attached to them whereas normal crypto addresses would always have a key such that transfers can be made from them but the case is the opposite in eater addresses. In essence, what enters the address is permanently there and can't be moved from there any longer. Eater addresses are only created to receive tokens for reduction of tokens in circulation, tokens can't leave the address in any way.
You can come about journals that would refer to an eater address as null or burner address. Projects built on certain blockchain networks have an identical eater address, for example, the null address on the Binance Smart Chain is 0x000000000000000000000000000000000000dead, ending with dead which projects on BSC utilizes for their token burn events. The same thing applies to the Ethereum network, the address is identical.
From the explanations above, I believe you have the full understanding of what the eater address is, and on the Steem blockchain, the eater address is @null, users can easily send tokens to this address in the quest to burn some tokens or rather set some beneficiaries on their articles to reduce STEEM in circulation. Let's take a brief illustrative example of a case.
- A few days ago, I was trying to share rewards to accounts that participated in my contest, unfortunately, I sent 5 STEEM to david-0 instead of david-o.
- I didn't realize that until the user notified me that I had sent to another account entirely, "oops, too many things on this small head, How could I have made that mistake. I sent another one to the user while I looked up the wrongly inputted address.
Screenshot from Wallet
- I realized the account was created about 5 months ago and no activity has happened on it so far. There is the probability that the user has lost the keys to the account which means the STEEM token mistakenly sent there might be lost forever.
- Assuming the owner has lost his/her keys, that makes it like an eater address but not totally. Eater address can't send out but if the account owner still have the keys then he/she would enjoy the free STEEM. The eater address on the Steem blockchain is @null, take note of that.
Highlights of Eater Address
- It is the type of address utilized for cryptocurrency burning.
- Assets that enter it are permanently destroyed, reducing the assets in circulation.
- Eater addresses are only created to receive tokens, they can't send out because they are not associated with a private key. That concept makes it an ideal eater address.
Users have adopted the burning of the STEEM tokens by setting reward beneficiary to the Steem's eater address, this is a great contribution to the ecosystem and we hope the number would increase as time goes on.
Conclusion
In conclusion, cryptocurrency burning is a mechanism put in place to reduce the circulation of assets in the quest to improve their value with demands that tend to outweigh supply in the long run, it's a healthy practice for the growth of projects in the crypto ecosystem. Eater addresses are utilized for that purpose, addresses with no private keys and tokens that enter remain permanently destroyed. I hope you have learned something today. Thanks for reading.
Written by:-
@fredquantum
Thank you @fredquantum for sharing such an informative piece in the community. I hope the community utilizes this and make the best out of this drive on #burnsteem.
Thank you, @steem4nigeria. I'm glad that you found this piece useful in the community, likewise, the support given to this article is not taken for granted. Thank you once again.
Educative as usual, the name is similar to what the burning account does, they eat, informative. The token has been burning ever since the ideas.
We steem on
Thanks for visiting my article today, @olabillions. I deem it fit to enlighten users that don't really understand the whole idea of burning and the address utilized for the burning process.
Greetings friend @fredquantum, a content of much contribution and value to the platform, especially in these days that misinformation makes many to opine without having the knowledge of the subject. This information is very important for everyone. A thousand blessings.
Hello, @mvchacin. It's a great pleasure that you have learned a few things from this article and I hope it would reach more people as it will help them to understand the crypto ecosystem better. Thanks for your visit, it's highly appreciated.