Ethereum’s London Hard Fork, which includes the EIP-1559 upgrade, went live on the 5th of August, 2021. The upgrade primarily introduces a mechanism with the goal of reorganizing the platform’s processing fees, among many other improvement proposals that came into effect. Users pay a base fee under the new system. This base fee is burned every time it is paid, hence, removing it from circulation. The network apparently burned 4,600 ETH, or about $12 million, in the first 24 hours after the upgrade.
Burning the currency? — that does not really sound right, does it?
When we imagine something burning, we conjure up an image of things being zapped.
But as malicious and audacious the repercussions of burning a cryptocurrency might seem at first, as it essentially removes a substantial number of tokens from the trading circulation, thus leaving them useless and of no value, it actually has some quite opposite and useful effects which are even lucrative. To wrap our heads around this concept which is seemingly destructive but turns out to be beneficial and even lucrative, we must understand how Crypto Burning works:
How are cryptocurrencies burned?
When cryptocurrency tokens are burnt, nothing is put to fire for real but instead what actually happens is that the tokens which are meant to be “burnt”, are sent to inaccessible wallets or addresses which are known as “eater addresses” or “black holes”. No one has access to these