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LINKS FOR ADDITIONAL READING FOR THIS VIDEO & ALL INFO IN TEXT DOWN BELOW:
Pros and Cons: https://www.coinist.io/pros-cons-of-premined-cryptocurrencies/
Morgan Creek Capital stays away from premined coins: https://www.elitecurrensea.com/forex-and-cfd-blog/cryptocurrency-analysis/crypto-news/premined-crypto-assets-are-avoided-from-index-funds/
Founder of Ethereum’s take on premined coins: https://www.cryptoglobe.com/latest/2018/10/vitalik-buterin-under-fire-over-ethereums-premine/
Compare to Proof of Work mining: https://cryptobriefing.com/the-miners-dilemma-premined-coins-making-headway/
Understanding the economics behind premined and PoW coins: https://cryptobriefing.com/instamines-stifle-crypto-adoption/
If you are somewhat new to this cryptocurrency space and you’re finding yourself curious about what it means if a coin is premined, significantly premined or instamined, I just want to say congratulations, I consider this a level up scenario because you’re starting to dig deeper and possibly fall into a mini rabbit hole with this one. Don’t worry, it’s a topic worth exploring since it will make you a better investor in the long run.
Premine: “A premine is where a developer allocates a certain amount of currency credit to a particular address before releasing the source code to the open community.” So essentially a premine occurs when the developer or developers decide for themselves how to allocate certain percentages of the coin supply before it’s open to the public.
*Note that a coin that is premined doesn’t necessarily mean it has been 100% premined, this percentage can range from a small percentage to a significant percentage.
Instamine: “the first few blocks have super normal block rewards, so only those miners in at the start are able to gain large holdings of the total % of that crypto currency.”
Maybe you’ve heard these phrases mentioned about different cryptocurrencies before. Maybe you picked up on the fact that these phrases are rarely brought up as a positive thing. Maybe that’s why you wanted to watch this video to understand exactly why that might be the case. If that’s so, I’m glad you did because that’s exactly what I’ll be going over next.