To understand why cryptocurrency burning happens, it is necessary to talk about inflation. This is caused when there is an increase in the price of services and goods, which results in the devaluation or loss of value of the currency. For the world of cryptocurrencies there is a process to prevent this from happening, which is called cryptocurrency burning. Crypto burning serves only one purpose: an increase in the value of each remaining token.

Simply explained, cryptocurrency burning consists of taking out of circulation a finished amount of coins. One may think that this process does not make sense, since it is throwing away something that has a value, but it is something fundamental. It should be remembered that, as a general rule, cryptocurrencies are infinite, so if we all mined a cryptocurrency from home we would lower its value.

This burning process consists of taking a finished amount of a cryptocurrency and sending it to a wallet to which no one has access, which is generally known as a black hole. This process, called Proof-of-burn, can be used by miners to gain access to mine cryptocurrencies. Basically, what these miners would do would be to burn tokens in order to have access to mine and get blocks at a much lower cost than they would normally have. This mining process is actually much better for the environment, since by getting rid of one crypto to get another one we will use hardly any energy.

This loss of assets can have several benefits that are key to the behavior of the currency in the market. The main and most important one is the possibility of controlling the value of the currency, stopping any inflation or deflation that the currency may suffer. 

In addition, this cryptocurrency burning can be very good for investors who are looking to retain the currency in their wallets for a long period of time, since burning is a way to make it easier for the value of their wallets not to drop too much. In addition, this burning process can also be used on certain occasions to return cryptocurrencies to people who have lost them in unintended transactions, diverting some cryptocurrencies sent to those wallets without access.

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