Learning about cryptocurrency economics can be a bit like biting into an oatmeal cookie and finding raisins when you thought they were chocolate chips: Entirely unexpected, and frankly unsettling.
Consider the case of AntPool—one of the largest cryptocurrency mining pools in the world. According to announcements on social media on Friday, the pool is "burning" 12 percent of the money it makes mining the Bitcoin Cash blockchain and is encouraging other miners to also burn a portion of their earnings. This appears counterintuitive, since for profit-seeking businesses there is normally an imperative not to light the money you make on fire. Very interesting! But why?
Coin burning, if you're not familiar, is a well-trod path to inflating the value of a cryptocurrency with a fixed supply, like Bitcoin Cash. The value of coins with a fixed supply is based on increasing demand and steadily decreasing supply.