In 2014, Counterparty controversially burned over 2,000 bitcoin, the largest amount to date. This was to create their native digital currency XCP, in a process know as ‘proof-of-burn.’
In proof-of-burn, bitcoins are sent to an address that is guaranteed to have no known or discoverable private key, which means that those coins can never be used again.
Counterparty explained, “It is important to note that burning those bitcoins did not in any way diminish the value of the remaining bitcoins on the Bitcoin network, just like burning fossil fuels does not make the fossil fuels left behind any less valuable.”
“All XCP that will ever exist were given out proportionally to those who recognized Counterparty’s value and were ready to ‘burn’ their bitcoins to participate in Counterparty.”
BTCBurns was inspired by Bruce Fenton, Executive Director of the Bitcoin Foundation. Fenton asked if there was a site that tracked all known burned bitcoins, believing it would be interesting, and a great tool for analysts, “because we really don’t have 21 million coins to be in circulation once all issued — it’s some number less than that.”
“I spent a few days working on it and