Burn is an interesting prerogative of cryptocurrencies

Leaving aside the speculative aspect, in any case respectable as a trader, it has a very important financial significance and it is the basis of some coins among this new type of digital money.

It works exactly the opposite of fiat currency.

#Burn is the destruction, so from a metaphoric perspective "they burn" a certain amount of coins.

The aims of this operation are rooted in the most basic law of the market: supply and demand.

In this way, the value expectation of the cryptocurrency object of the #Burn is kept "alive".

By decreasing the supply of coins, without prejudice to the demand, there is an increase in value.

Here is the speculative side that traders can take advantage and we’re going to go deeper in one of the next posts.

Now let's analyze why #Burn works the other way around if compared to fiat currency.

Current money in circulation cannot be "burned" as it would not make sense: it has no underlying!

But it can be printed. Well, again according to the law of supply and demand, by increasing supply the value decreases.

This reduction translates into purchasing power ... Have you ever heard of inflation?

The key difference between fiat currency and the most part of the cryptocurrencies - is this: fiat currencies are regulated by an arbitrary inflation while cryptocurrencies are deflationary, or at least, they have a public and predetermined inflation.