Many people are familiar with the security of an NFT. It will be bonded to the blockchain, making it impossible to replicate. But what if you wanted to get rid of it? Can you destroy an NFT?
An NFT can be destroyed in a process known as burning. Sometimes you can burn your NFT on an NFT platform and other times you will need to send it to a black hole address. Since no one can access this address, the token will be gone. It will be irreversible. This process is often done to reduce supply, potentially increasing the value.
If you are interested in learning how to “burn” an NFT keep on reading to learn the simple steps!
What is Burning an NFT?
NFTs will always exist on the blockchain. But that doesn’t mean that it isn’t possible to get rid of it. As I just mentioned this process of getting rid of it is called burning.
In this case, you will need to send the NFT to a wallet address that no one owns. While it still exists, it will be impossible to access. This renders the NFT unusable. However, all the previous transactions will still be preserved as part of the ledger.
How to Burn an NFT
While burning an NFT can sound a little complex, it won’t be challenging. There are a few ways that you can do this.
First, most crypto exchanges will allow you to burn the tokens. You’ll just need to follow these steps:
- Log into the exchange.
- Select the NFT you want to remove
- Sometimes, you will need to first delist it from the marketplace
- Go to the settings and click on the burn option.
- You may need to enter your ID and select ‘burn’
- After you have done this, it should no longer be in your profile
If your exchange doesn’t let you burn it, you will need to use what’s known as a black hole address. This is an address that doesn’t exist, so it can never be accessed. One of the most common examples of this is 0x0000000000000000000000000000000000000000. Interestingly, it’s estimated that this account holds around $520 million worth of tokens and NFTs.
Once you have burnt the NFT, the transaction will be recorded on the blockchain. The token will then be deemed unavailable. Since all the transactions up until the point of burning will remain forever, it will be easy to verify that the NFT has been destroyed.
Before we move on to restoring NFTs you will want to know how to mint an NFT and we suggest the following article:
Can You Restore a Burnt NFT?
Not everyone burns an NFT intentionally. There have been plenty of people who have accidentally sent their precious NFTs to a black hole address. This error often happens because the black hole has been sent as the default address, and they hit the send button without intending to.
I read the founders of Ethereum have the means of accessing this black hole. However, they have yet to retrieve any NFTs or tokens and if they did you would have a compromised commitment to preserving the integrity of their blockchain.
Basically, if this happened, the confidence of the crypto community will be rattled. Suddenly, millions of dollars worth of tokens will be back into play. This could cause a massive market correction as the price of certain NFTs plummets. It’s unlikely that it will ever happen.
Because of this, there is nothing you can do to retrieve an NFT after it has been burnt. This gives investors and NFT collectors confidence that it is really gone once a token has been burnt.
Who Can Burn the Token?
It’s important to note that you will need to own the NFT before you are able to burn it. If you are the creator, you lose the right to burn the NFT once you sell it. Similarly, you can’t stop the new owner from burning the NFT.
Side Note: all tokens and cryptocurrencies can be burnt. Technically, any asset on the blockchain is capable of being burnt. All you need to do is send it to a black hole address.
The Costs of Burning an NFT
Like all other transactions, burning an NFT through an exchange or platform will come at a price. You will be required to pay the gas fees. How much will be will depend on a range of factors. This includes:
- The time of day. The busier the network is the more you will need to pay to convince the miners to process your transaction.
- Number of NFTs you wish to burn. The more you want to burn, the more power the network will need to dedicate to processing the transaction.
- Currency. The price of the currency can fluctuate a little.
You will need to make sure that you have sufficient funds in your account to pay for the gas fees. If you don’t, the transaction won’t get approved.
Why Burning an NFT Can Make Sense
For many people, the thought of burning an NFT can seem very odd. Why make something just to destroy it? There are a few logical answers to this question.
The most obvious answer is that minting it was a mistake in the first place. This can sometimes happen. You might plan for a run to contain only 15 NFTs but end up creating 16 instead. Burning one will fix this issue.
In most cases, the NFT will be part of a limited run. Because of this, they might mint a large number and make them available for a limited amount of time. Once the sale has been concluded, any unsold NFTs will be burnt. This ensures that investors will retain value in their tokens.
Furthermore, investors can use a strategy to increase value in NFTs. You can buy multiple NFTs of the same piece of art. If you burn replica NFTs, yours will become rarer. As a result, you will be able to increase the value of the ones that you hold.
Some projects are starting to embrace this idea. They allow people to combine their NFTs into a single entry. This serves the same purpose as burning them.
If you are really wanting to increase the value of the NFTs you have personally created then there are better ways than just burning them. Check out this super popular article:
Downsides to Destroying an NFT
As we’ve seen, there are plenty of reasons why burning an NFT might be a good idea. But there are also a few downsides that you will need to consider. These include:
- Irreversible transaction. If you later realize that it was a mistake there is nothing that you can do to retrieve your NFT.
- Not guaranteed to increase the price. People often burn to manipulate supply and demand. If you burn the token, you are reducing supply. If demand stays constant, the price should increase. While this is a sound theory, there are no guarantees. If demand also drops or investors fail to react to the burning, it won’t produce any impact.
- Cost. If you are struggling to sell your NFTs, burning them might not be the best option. It can be an expensive option. You’ll probabaly pay gas fees to remove them from the blockchain. To cover these costs, you’ll need to raise the price of your remaining NFTs.
Burning an NFT has become a common occurrence. It is often done to reduce the supply of the token. Assuming the demand remains constant, the price of the token should go up. This is why it is a common move for investors.
Likewise, NFT or cryptocurrency can be burnt; you just need to send it to an inaccessible black hole address. Since it can’t be used, it will be taken out of circulation.
Also, if you need more info on the world of NFTs I highly advise you check out these quick and easy reads: