Effective Ethereum burning.

[Yugocean]

In process to start Ethereum 2.0 The burning of ETH tokens on the Ethereum network is in progress under "EIP 1559" or "London Hard Fork".

So far, more than 8 thousand ETH tokens worth millions of dollars have been burned.

The process of burning is for the purpose of deflation, which reduces the supply of token. This results in decrease of the availability of tokens in the block too thus increasing the chances of the gas fee going down.

Although the tokens continue to be burned, the gas price hasn't come down yet due to the lack of miners' impact. But it is having a fair effect on the market.

The cryptocurrency market turned green due to this process with almost all cryptos registering an increase in value.​

 

[Mika]

I am glad that you explained this. I have been hearing about London Hardfork and ETH burn for some time and I was wondering why ETH is being burned. Looks like they are burning ETH for two purposes, to increase the price and decrease the transaction cost. The price has definitely gone up due to burning.

 

[Yugocean]

Looks like they are burning ETH for two purposes, to increase the price and decrease the transaction cost.

There are many purposes, main was to make mining hard for miners and cleaning the blocks from high liquidity. This market rise was not intentional, but the effect was not unknown that decrease in supply will increase the value.
However, not only ETH, but also the entire market dramatically turned into green.

 

[Alexandoy]

Until now I cannot comprehend the logic of the burning. If I own 10 million crypto coin and I would burn 1 million then will the price of crypto increase substantially for my 9 million to have a value of 10 million or more? Most likely the price of the crypto would increase due to the lesser supply. But if the amount of burned crypto coin cannot be compensated then the burning is a loss.

 

[Suba]

Until now the amount of Ether that was burned was almost close to 2 million Eth. At last year's London Hardfork, 73,784 Ether had been burned, or USD233 million (at the time). But it seems that this burning only accelerates transactions and maintains price stability and does not reduce the gas fee per transaction.