Vitalik Buterin burned $6.7 billion worth of SHIB coins last year. How exactly did he do this?
How easy is it to get rid of nearly $7 billion worth of unneeded cryptocurrency? In reality, it’s a lot harder than you might think. However, to accurately answer this question, we should refer to a recent interview with Vitalik Buterin, the co-founder of Etherium. On the UpOnly podcast, Buterin explained how he “burned” his Shiba Inu tokens, which were worth billions of dollars at the altcoin’s peak price. We tell you more about the situation.
Recall that the story of Vitalik Buterin's SHIB tokens was one of the biggest dramas of 2021. In the end, it all came down to the fact that the developer got the crypto from the developers without wanting it himself. And after some time, he sold the coins to send the proceeds to charity.
Although Buterin's intentions were positive, his actions were still criticised. Most of all, SHIB coin owners were unhappy with such a decision, because due to Vitalik's actions and further market collapse their investments sagged considerably in dollar terms.
Shiba Inu dog
Be that as it may, the story of the sale turned out to be very entertaining.
How did Buterin sell Shiba Inu?
To recap, Shiba Inu (SHIB) is an altcoin inspired by the famous Dogecoin, which saw a big rise in value early last year due to a promotion on Twitter by Ilon Musk. SHIB got even more hype: the cryptocurrency became one of the most profitable investments of the year and rose in value by more than 40 million percent in a relatively short period of time.
In May, the project's anonymous developers sent 50 percent of all tokens to Vitalik Buterin's cryptocurrency wallet. At the time, 505 trillion SHIB was worth more than $8 billion. The tokens were sent in order to "burn" them - the developers did not expect anyone else to use them. Incineration was needed to reduce the number of SHIBs in circulation, i.e. to reduce supply. In theory, this could raise the price of the cryptocurrency if there was an equal demand for it.
On top of that, the developers wanted to "enlist" the support of one of the world's major blockchain developers by using his name to promote the project. They claimed that "Vitalik will not leak" their tokens and in fact continues to keep them in his wallet. Though Buterin certainly didn't ask for the crypto to be sent to his public address.
Vitalik Buterin
Later that month, Buterin forwarded the tokens he received as gifts from many people – including 50 trillion SHIB worth $1.2 billion – to the Indian pandemic charity COVID-19. Vitalik burned the remaining 90 per cent of SHIB, arguing the fact that he “doesn’t want that much power in his hands”.
But how exactly did he sell them? This is another interesting part of the story. According to Decrypt’s sources, the whole process was quite “interesting and even frightening”, because, according to Vitalik himself, he was trying to get rid of a sum of money larger than he had ever had in his life.
The tokens were stored on a cold wallet, access to which was encrypted in the form of two secret combinations, which were written down on different pieces of paper. Only by combining these symbols could a private key be obtained to unlock the wallet. Here is Vitalik’s quote.
One of these combinations was with me, the other was with my family in Canada. So I had to call them and ask them to dictate the symbols over the phone.
The peculiarity was that SHIB developers sent the coins to the same address where Vitalik Buterin used to keep his 333 thousand ethers. Naturally, for better security Vitalik did not have access to this wallet on a daily basis. That's why he didn't touch SHIB for a long time, thus kind of helping this project and its reputation.
The growth of Shiba Inu last year
Buterin then bought a new laptop – specifically for the transaction. This security measure was necessary to ensure that the funds would accurately reach the address he wanted.
I sent my ETH in a transaction through the laptop, which I had purchased at Target for about $300 specifically for this purpose.
Also Buterin checked the code of the wallet he was going to interact with. This way he wanted to make sure that his coins wouldn't be sent to fraudsters and would remain safe.
Before completely disconnecting his laptop from the internet, Buterin downloaded a program to generate QR codes. After creating the Ethereum transaction, he scanned the QR code with his phone, copied it onto his laptop and then pasted it into the transfer. Finally, the tokens were sent to the cryptocurrency’s contract address, so that for sure no one else could use them.
Well, what happened next is already known: Vitalik dumped some of the coins on decentralised exchanges, which had a negative impact on the token exchange rate. In response, the cryptocurrency community declared war on him. A few days later, the market experienced one of the biggest collapses in its history, which caused the episode to go under the radar.
We believe that this story speaks about Vitalik as an exceptionally good man, who isn't particularly interested in money and is willing to share it. Still, he could have made billions of dollars on those coins, but he didn't do it consciously. One would like to believe that more and more wealthy members of the crypto industry will do similar things, thereby improving the reputation of the niche.
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