The null address in crypto is specifically generated to allow Proof of Burn. Coin burning happens when a token is intentionally sent to an unusable wallet to remove it from circulation. The address is called a burn address or eater address. It can’t be accessed or assigned to anyone.
This article will explain the null address, why crypto projects send tokens to it to burn it
does somebody control that address?
What is coin burning?
Crypto tokens or coins are burned when they are permanently removed from the circulating supply on purpose. Token burning is usually performed by the development team behind a particular crypto asset. It can be done in several ways, most commonly by sending the coins to an “eater address”, whose current balance is publicly visible on the blockchain, but access to its contents is unavailable to anyone.
What is proof of burn?
Proof of Burn is a consensus mechanism aiming to bootstrap one blockchain to another with increased energy efficiency by verifying that a cost was incurred in “burning” a coin by sending it to an unspendable address.
How different is proof of burn from proof of stake?
Proof-of-burn is similar to proof-of-stake because both consensus mechanisms involve interaction with coins to secure the network. Coins locked in PoS systems aren’t permanently erased; their holders can still access and sell them in case they want to leave the network. On the other hand, PoB, unlike PoS, leads to coin scarcity.
Is null address the same as vanity address?
Oftentimes, there is confusion between a null address and a vanity address. A vanity address is a personalized crypto wallet address with letters and digits chosen by a user. Standard addresses are just a string of random letters and numbers, but a vanity address gives your wallet a unique aspect. On the other hand, a null address is an address created specifically to receive tokens that are being intentionally removed out of circulation.
Does somebody control the null address?
You may wonder if the null address is managed by somebody. Well, the null address is created by a blockchain for the sole purpose of dumping an unusable token. Therefore, the address is public and is publicly verifiable. However, the tokens sent to the null address will never be used.
Coin burning is a process where crypto miners and developers remove a specific portion of coins from circulation to control their price. This is a common industry practice to incentivize long-term holding of the coins among users by managing the price through restricting supply. A null address is an address generated to allow the proof of burn process.