We have come a long way from cooking the books and these days just throw the money straight into the fire. For one the soup no longer tastes like paper and two the ashes add artificial flavour which tricks you with a sense of value.
I will just leave that mutilated analogy there as I ponder the reason my fingers typed that.
TL;DR Burning tokens only provides perceived scarcity then people buy at higher prices because they FOMO.
Token BurnsDo they matter?
Whose responsibility is it?
From what I have read they do matter as a form of value increase or stability provision. You have a current supply and then you reduce that circulating supply which then increases the value.
I think Coinmarketcap has a formula, let me get it...
Circulating supply * Current Price
Oh my bad, that is for the marketcap... I have never given a shit about marketcap then again I am a shit trader. Those two variables though are pretty useless.
Let me fix my previous statement:
You have a current supply and then you reduce that circulating supply which then increases the PERCEIVED value.
Better. Apparently, investors and stuff like to go: "Well look how little there is of this thing we have to buy it no matter the cost."
Source ~Perlinator / Pixabay
Economics and people are fucking weird. A lot I think depends on the token, and how it is being "minted" for Hive which I think just goes on eternally until we all die or at least only 20 out of 21 witnesses remain; token burning acts as a deflationary countermeasure.
Fixed Supply is already scarcity
For @Proofofbrainio which has a cap of 21 Million tokens as mentioned in Burning the Evidence ~ Calumam; coincidently also the reason I am haphazardly trudging through this post.
Well for a token capped at 21 Million it is almost only useful in creating current perceived scarcity. Now I guess the trick is finding balance.
I imagine for an inflationary token that is far simpler. Burning tokens benefits everyone if you consider supply and demand. I think that burning is a very static token game. As in rewards are static, block production, fees etc.
POB and Hive etc are far more dynamic when it comes to distribution, and because we are human it is also irritatingly wrong but you just can't put your finger on it but if burning benefits everyone I am almost more inclined to say fuck that shit.
The price of POB is more than likely not the price because of burning, and for many tokens that might be the case also. It is the price because of a small group who put a lot of money in so they can make a lot of money out.
Simple. We all benefit from that and we will all suffer the consequences of that.
Anyway... I don't think burning really matters within the constraint of a capped supply token. I would be far more inclined to limit the distribution rate and even make it far more costly to add stake while providing alternatives for higher levels to use their POB instead. Finding a sweet spot for how much is worth milking.
Basically, the system should never trust the user and it should do its best to get back ownership of the tokens or lock it somehow... Crude but I like it.
So does burning POB token are more specifically burning a fixed supply token so early in the game help? I don't think it really matters, the only thing that will happen even if POB accelerated burning to the point that the only liquid is that in user wallets and their current vote value, and the pending payout. It does not really matter.
When POB reaches 21 Million tokens minted, I would hope it is not the one we are on now.
The site itself will still have to go through many changes and iterations to break from the narrow user base it can currently support. Leo, POB and all the communities will eventually need to evolve into more robust systems. We can invite all the facebook, wordpress, blogger users we want but you would be silly to think that this is an alternative to any centralized "blogging" site .
A lot of that has to do with the token and perceived scarcity. It is a mentality thing and if POB is so scarce that people see 0.001 on their posts even at $5 value that does not align with how we see value in our everyday lives and will still be perceived as worthless.
So make the token as scarce as you like early and keep doing that, whose job is it? Anyone can do it but unless it is in the code for a good reason I don't see why the system "@Proofofbrainio" should do it.
Instead, the system should horde with the intent to recycle by providing more utility within itself as the platform grows and becomes something more. This can be via capped voting multipliers, paid tag moderation, promotion etc.
What the platform will evolve into I don't know but I know it needs to and abstracting the token from how it is interacted with will be pertinent.
Point is the token is already capped, the bigger problem is how to control what you have instead of throwing it to the dogs.
Yeah yeah I know I lost the plot, hence I added the TL;DR.