If you are building on Hive (I am) and you trust Hive consensus (I do) then there is no reason to not employ proof-of-burn mechanics when designing a new token. Well, there is one really good reason actually: There is no code anyone can clone to create a proof-of-burn token. I'm working on it.
When it really comes down to it: if you are already trusting Hive witnesses and Hive full-nodes, making your own token out of thin air without giving anything back to Hive is just kind of wasteful. There is one really nice thing about HiveEngine: it piggybacks on top of the Hive upvoting system and GREATELY simplifies the process of creating a token that allows user to generate inflation at the click of a button. However, my interest right now is more focused on gaming, defi and algorithmic stable coins, so the social media aspect doesn't really need to come into play the way it does on Hive and these other communities.
Blackhole void: @null
When funds on Hive enter @null, they exit the network permanently, cast into the blackhole. However, most people don't burn their funds for no reason, and there is an expectation that value will be created from that sacrifice. So far there aren't a lot of options as to what can be done with such massive utility.
Three years ago we could burn coins to get listed on the "promoted" tab. This was sort of worthless because no one looked at the promoted tab. It was far more profitable to buy votes from bid bots and get on the actual trending tab. In the last three years, not much has changed. We got an upgrade that shuffles promoted posts into the trending tab so people actually see them: that's about it.
Whitehole
This is the value that gets created after sending funds to @null. The sky is the limit in terms of what can theoretically be created in this process, but we've yet to see any kind of revolutionary advancements. I hope to change that with Magitek but I still have a lot of work to do before I can even start alpha-testing (let alone beta-testing).
But I'm pretty committed at this point: to the effect of quitting my job and working here full time. I've never made a dime from any kind of dev work here but we'll see if I can turn that around. And again, none of this is competitive. I'm not trying to siphon value away from any other project/community. That's not how this works. In fact, I'll likely be creating a premine in the beginning that allows beta testers to mine a full daily share for $1 a day. After that's over mining will be competitive and based on number of HBD destroyed or liquidity provided to the farms.
Personally I've always been fascinated with the idea of sending money into the blackhole and extracting value via the whitehole. Honestly I expected that by now there'd be a lot more options revolving around this utility. Alas, no dice.
Thought experiment.
So imagine we can destroy $100 worth of Hive by sending it to @null, but in doing so we can create $100 or more worth of value on the other side. Why wouldn't we do that? What I'm getting at here is that proof-of-burn mechanics create value twice automatically, and that's pretty powerful stuff. Every coin that gets sent to @null will never appear on any exchange or drain our liquidity in any way ever again.
There's a reason Hive hasn't implemented SMTs yet. Any guesses? They're expensive. In my three years here I've already seem multiple node runners complain about server/bandwidth costs. How much more expensive would it be to upkeep a database that's tracking a thousand different tokens? This is why putting everything directly on the same chain isn't necessarily a good idea (just look at ETH). Second-layer strategy is imperative to scaling up flat-architecture properly.
But now imagine if every token on Hive was suddenly destroying thousands (or even millions) of dollars worth of Hive/HBD. All of a sudden that business model becomes highly attractive to the network and we can pay for everything. Everyone loves a good supply shock (except me). Obviously we don't have to worry about how expensive it is to run a Hive node if the income supersedes the cost. That's just capitalism 101.
Conclusion
Well, I think I'm going to get back to it. The grind continues. I just wanted to point out that I've been thinking about this whole strategy recently in terms of this blackhole/whitehole theory. We can create value twice with extreme deflationary and hyperinflationary mechanics that work in tandem to create stability and massive value. That's the idea anyway.
Return from Proof-of-Burn: Black-Hole >> White-Hole Tech to edicted's Web3 Blog
