The practice of offering incense, with a bow, to the Taoist altar is called Baibai. As the incense burns, smoke rises, and ashes fall. The ashes represent impure air that sinks; the smoke, pure air that rises. So the offering represents the separation of pure from impure - the refinement and purification of internal energies. It also symbolizes the human body as being the meeting-place of Heaven and Earth: as the smoke rises, and the ashes fall, we make a connection with both earth and sky.
The Taoist Altar & Taoist Cosmology
All of Taoist cosmology is represented in the Taoist altar: Tao (as the Sacred Lamp) giving birth to Yin and Yang (the two candles), out of which arise the Five Elements (the five plates and bowls), which are the constituents of the “10,000 things.”
The Inner Alchemical "Path of Return"
Also represented is the Internal Alchemical path of transmutation, which – by working with the energies of the human bodymind—reverses this process, bringing the practitioner back to the Mind of Tao. In this "path of return," the incense burner symbolizes the lower Dantian. The burning of incense represents the purification of Jing, Qi and Shen, which balances the Five Elements. This balancing of the Five Elements frees the virtues, and empowers the Deities of the organs. Finally, Yin and Yang are unified, allowing the Light of our Primordial Wisdom (the Sacred Lamp) to shine forth unobstructed.
When All Has Turned To Ashes, Enter Bliss
You can find parallels to the practice of Baibai -- an offering of incense or a “sacred burning” -- in many other spiritual traditions. Here is a verse from the Vijnanabhairava Tantra, a foundational text of Kashmir Shaivism:
See the entire world as a blazing inferno. Then, when all has turned to ashes, enter bliss.~ verse 53, from Daniel Odier’s Yoga Spandakarika
This verse was spoken by the mythological Bhairava -- who can be understood as an emanation, within the tradition of Kashmir Shaivism, of what in Taoism would be called Primordial Yang. Bhairava spoke this in response to a question posed by Bhairavi, who represents Primordial Yin.
Bhairava and Bhairavi left the undifferentiated state - in which they were lovingly, and in silence, united - so that their most sublime dialogue might enlighten all beings. Or - in Taoist terms - they emerged from Wuji (the Tao) into Taiji, becoming the dance, within the world as we know it, of Yin and Yang, both fully conscious of their Divine origins. Because they haven't lost touch with their Divine Source, every thought, word and movement of their dance points to that Divinity … so that those observing this performance, listening to their dialogue, might also be awakened to their own True Nature.
To see the entire world as “a blazing inferno” is to offer the ever-changing appearances of our daily life as we might offer a stick of incense, to the altar of our spiritual unfolding. What is actually being “burned,” in this spiritual process, are our dualistic habits of mind, the sacrifice of which gives rise to the bliss of Awakened Mind - the Mind of Tao.
As Taoist practitioners, we train our perception in the direction of seeing that the appearance of birth-and-death - symbolized in the opening and closing the altar - is merely an appearance, arising out of and dissolving back into Wuji, the root of Tao. To be stable in this seeing – to know it directly – is to have “entered the bliss” of Immortality, utterly free from the fear of death, for we now know, without a shadow of a doubt, that even after the altar is closed,
the lamp still shines ...