Charles Hoskinson noted that to destroy the coins, they would first have to be taken from the owners

Cardano CEO says no ADA tokens available for burning

01.09.2022 - 13:25

131

3 min

What’s new? The founder of the Cardano blockchain Charles Hoskinson wrote on Twitter that the only way to burn native tokens ADA is to take them from users because there is “no magic reserve” of coins. The tweet was a response to criticism from a user under the pseudonym PerAsperaVinco, who reproached Hoskinson for his ignorance regarding the ideas about the token process of destroying tokens.

Cryptocurrency burning is the process of removing a certain number of tokens from circulation, after which they become permanently inaccessible. Often burning is carried out in order to increase the rate of an asset or prevent it from inflation. Burning can be done by sending tokens to a wallet without a private key, by conducting a hard fork, using special software, or using algorithms that destroy some of the funds during transactions.

What is the essence of the criticism? PerAsperaVinco stated that “the astonishing power of ignorance is revealed when someone as intelligent as Charles Hoskinson believes burning coins is destroying someone’s property.” According to the user, this analogy is incorrect because only part of the property is being destroyed in order to make the rest more valuable.

For his part, Hoskinson responded that “the astonishing power of ignorance is revealed when people cannot grasp that there is no magic reserve of Ada floating out there.” According to the head of Cardano, all tokens are in the hands of owners, real people, and in order to burn the coins, they will first have to be taken away.

In discussion with other users on Twitter, he also reported that other projects sometimes have secret premined coins that are controlled by the founders and burned during periods of low liquidity to manipulate token prices.

Premining is the procedure of issuing tokens by the developers using a special algorithm before the public launch of the project.

Many users criticized Hoskinson’s opponent, also pointing out the lack of free tokens to burn and noting that he could destroy all of his ADA if he wants. One panelist jokingly offered to provide his special “burn address.”

According to a 2022 report by marketing firm MBLM, Cardano became the most recognizable crypto project, ranking 26th among 600 brands surveyed from 19 areas in the global ranking and 4 points ahead of bitcoin.

Cardano was created by Input Output Hong Kong (IOHK) and Ethereum co-founder Charles Hoskinson in 2017. The platform supports smart contracts, with the native token ADA enabling participation in the network’s operation. The asset ranks eighth in the cryptocurrency ranking with a capitalization of $15,1 billion, according to CoinGecko. ADA is trading at $0,446 as of September 1, 10:40 UTC, down by 2,3% in 24 hours, according to cryptocurrency exchange Binance.

Author:

Michael Golikov Michael Golikov

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy