When a cryptocurrency community decides that they want or need to destroy units of a specific cryptocurrency, they use a process called coin burning. Burning crypto is the process that effectively takes those tokens out of circulation, reducing the total supply of that coin and in some cases increasing demand.

The major benefits of token burning is the effect it can have on the cryptocurrency's value. For multiple reasons, the average price per coin can increase after a large burn. The goal of token burning is to reduce the overall supply of a cryptocurrency.

Burning crypto can help the cryptocurrency rise in value. Although this is far from a sure thing, some cryptos have seen positive price movements after tokens are burned. If a cryptocurrency has a high inflation rate, burning tokens can curb the increase.

For example over 180 billion SHIP has been burned. Most of these are due to Buterin burning 41% of the supply. But there have also been a lot of community burns.

Shiba Inu rose to prominence as 50% of its tokens were donated to Ethereum founder Vitalik Buterin, to which he refused and burned the majority of his tokens. Tokens are 'burned' when they are taken out of circulation – usually through sending to a dead address.

The act of burning a digital asset involves sending it to a place from which it can never be retrieved, also known as a burn address, which effectively removes the digital asset from circulation by locking it up for eternity.

How Many Bitcoins Are Lost?

There's no exact answer. One recent estimate is that about 3-4 million bitcoins are lost forever. It is impossible to know an exact number since a lost Bitcoin looks exactly the same on the blockchain as one that is not lost.