Is burning of BCH by SmartBCH is necessary? BCH is deflationary as it is, is taking coins out of circulation a good idea? Are there other valid reasons to do so other than the price increase it'll lead to. #BitcoinCash
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9 comments
I see no problem with that.
Why not? The more usage SmartBCH gets, the more BCH will go out of circulation. After a certain threshold, there will be a liquidity problem when there aren't enough coins in circulation. If such a problem arises, people naturally go to some other coin with good liquidity. I am concerned if this is a good idea in the long term.
1 BCH is 100.000.000 BCH-satoshis. There won't be liquidity crisis for a LOOONG time, and if it looks like there will, fractional Sats should be implemented. More BCH (and BTC) has been taken out of circulation (people loosing their keys, Satoshi coins (many are likely lost) etc.) over the past 10 years, than SmartBCH will burn with the same popularity as ETH over the next 10 years.
https://noise.cash/post/l25jqn68 I made posted my concerned about higher user facing fees here. Burning is like a hidden tax on transaction fee.
"Burning is like a hidden tax on transaction fee." Except for that fiat-value aspect if supply goes down, I don't see that at all. Also, in general - noone can stop anyone from burning their BCH if that is what they want to do. This is a permissionless system and there are no consensus rules that forbids it.
People can burn what is theirs I agree. If half of the fee is burned then by definition users are paying double the real value of the transaction. Why systematically make users double pay for something?
While that can be correct over a longer tail period of time, I do not see that as a problem. It just strengthens BCH as a SOV.
I wish the burn wasn't there too.
Why do you wish for that?