OK, MobileCoin has not burned any coins yet but they are stuck. Before getting to that and as a reminder, MobileCoin is the crypto recently integrated with the Signal App, currently beta testing in England. Secure communications combined with secure payments is kind of cool. Now on to coin burning.
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The MobileCoin Foundation is sitting on 215 million coins that they want to get into circulation, but given the fuzzy Securities and Exchange Commission (SEC) guidelines, they don’t know how to do it. There are probably more than a couple of ways to do this, one is an AirDrop, giving away coins for free or for minor tasks such as positive posts on social media.
So what is an AirDrop? Many crypto companies distribute free coins to their communities to increase their project’s visibility, increase the circulating supply and stimulate trade. These free distributions are commonly known as airdrops.
Bitcoin distributed coins to miners as a reward for mining new blocks and validating new blocks. Another method is to give away coins to current coin holders. If you have a total supply of 100 million coins with 50 million already in circulation, give away 1 coin for every 1 coin held. This of course will devalue each coin by 50%. The final method is burning coins.
What does it mean to burn coins? There are two obvious ways. If the coins have already been mined then simply delete the private key, poof-gone, never to be seen again. When the coins have not been mined yet, a software update is pushed out to at least 51% of the miners, changing the coin supply curve, and the coins will never get created.
Stellar Development Foundation burns 55 billion coins. This is crazy, kind of like an anti-Federal Reserve burning money versus printing money. Because crypto is considered a security (in some jurisdictions), it must follow the laws of the SEC. It is simply easier and safer to burn the coins.
Back to MobileCoin, company policy says a US citizen cannot buy MobileCoin inside or outside of the US. You can follow the status on buymobilecoin.com but unless you set your VPN outside of the US you will get an Error 1020, Access Denied. It is unclear when this will get rectified and when we might see MobileCoin in the US and better yet, be able to send MobileCoin through the Signal app. The easy way out just might be that MobileCoin burns some large percentage of the 215 million coins it currently holds. If that happens, expect the value of MobileCoin to hit the moon.
Stay tuned…