nucky_root1 - 2 year account age. -15 - 35 comment karma.2 months ago
The burner wallet is a web based wallet located at https://xdai.io/ that can interact with the Ethereum main net, and a septate blockchain called the xDai Chain. The xDai Chain works on the same technology as the regular Ethereum chain with 3 big exceptions.
The native token is xDai (not Ether)
Instead of "Proof of work" it uses "Proof of Authority". In this case there are 4 entities that secure the network (So it is very centralized compared to Ethereum's decentralization)
There are no block rewards, and the native coin is xDai (insted of ETH)
So what do you use if for? On the Ethereum chain you can "Bridge" Dai tokens to the xDai Chain as xDai tokens. On the Ethereum chain you will "lock" Dia (ECR-20 stable coin) tokens, this action with activate the "Bridge" that will mint the same amount of xDai coins/tokens as the native coin on the xDai Chain. Since the xDai Chain is POA, you can transfer xDai coins on that chain with very low fees (based in xDai instead of ETH), and quick/consistent 5 second block times. Since this is a new and somewhat centralized service, it is recommended to use caution, and only small amounts of funds.
I would say the idea would be to use a currency/blockchain like this similar to how you would carry cash in your wallet. Load up enough xDai for the weekend to buy coffee, and split dinner bills with your friends. The Burner Wallet stores your private keys in the browser's local storage. So if you phone gets hacked, or lost without a backup, all the funds will be gone (like losing you wallet).
Let's say your friend gave you 10 xDai for gas money last weekend, and you want to turn it into regular Dai or ETH. You would "Exchange" the xDai for Dai using the bridge. This would destroy the 10 xDai coins on the xDai chain, and unlock 10 Dai tokens on the Ethereum chain. You would then probably want to move that Dai to a safer wallet (remember, the private key on your phone is the same on both networks). Or maybe exchange the $10 USD worth of Dai for ETH at the current ETH price.
(this reddit post is actually a link to a blog post, but the thumbnail didn't show up, so it might look like it's just a question; gotta figure that out)
Anyway, your answer's a great one (and more concise), so thanks!
And that podcast episode is a good one for sure