Topic: What does it mean that a coin is premined or instamined? (Read 1192 times)

If your market is speculators hoping to win a game with greater fool strategy, enjoy the way up. But when you try to market to hard working honest folks who don't like rewarding those who gave themselves a bonus before the game ever started, enjoy the way down.

.

It's all about approaches, If that is true then LTC Litecoin with 150 premined coins practically 0 , And dogecoin  0 premined will could reach 0 value. Both are in Top 10 just now.

I would say the amount premined has no effect on it's value.
The value is decided solely on what the world wants to assign to it.
Think of it as a popularity contest.. The more popular the more they are worth.
So sometimes premined coins are actually very popular.

Sorry i missed your topic point OP

As far as markets are concerned, a very different perspective emerges than what has been asserted above.

Most non-premined, non-instamined, well distributed, perfectly launched coins go straight to zero. If not straight to zero, to zero in quite a short space of time. Of the top 10 market cap coins, more than half have 'complex' distributions to say the least.

Conclusion: Proof of Work is one way to distribute coins. But markets are ultimately a fairer mechanism of distribution because they price everything - not just emmission curves and electricity  

Well on that case I guess that these last kind of rich bagholders could are selling continuosly his stolen BTC because on transactions big they could be more easily detected.

Exactly,

Fortunately He dont dumped any coin since long time ago. But if he decides or another Bagholder dump all coins on like a day cause apart from the drop in prices a much more adverse effect that would cause panic sales throwing the price to levels rarely seen since a long time ago. A similar effect has been the case with most of Altcoins on market where the price has been hammered by large sales volumes.

Satoshi was mining almost alone in 2009 year. Ther were some calculations that his premine is around 1 000 000 BTC, or 4% of all bitcoins.

Yes and Not.This is based on the total of supply but even 3% can be a lot, Logically it the coins is a scam the dev will sell inmediately to get profit and after left the coin and the price will drop drastically throwing it to a certain death on almost cases. However if a project is legitim the dev should have the right to reserve a certain amount of coins but giving the certainty that will not sell these at least in the short or medium term like for
example to BTC, If I remember correctly Satoshi Nakamoto  has not sold not one of his BTC, However this does not mean that him never will do, The same that anothers bagholders  perhaps causing a drop in prices, so that everyone should proceed according to its criterion.

Nobody is explaining the answer well to the OPs question.   

A premine, means coins were given out before mining started.  That basically in the genesis block a certain amount of coins were distributed to accounts when the chain started. 

In PoS coins, this is typically a 100% premine as all the coins are created at block 0.  An popular example of this is NXT.

Instamine is a little different.  That is when a PoW coin has basically been set up so that the the dev and friends are the first and main miners of the blockchain and therefore reap a high amount of coins early on.  A popular example of this is Dark/Dash.

A fair distribution is often a point of contention in either of these cases with early birds who got a lot for little saying everything was fair or has been redistributed by now so don't worry. 

PoW people try to cry foul when seeing any Instamine or Premine saying said coins are cheating, but we should all remember that Satoshi has mined over 1 million Bitcoins, but Bitcoiners too will tell you it is fair because nobody knew back then it would be worth something.  But the fact is nobody knows anything is going to be worth something until it finally is. 

Some people by into IPO coins and share a large part of the genesis block coinbase only to see that blockchain crash and burn, then they cry it wasn't fair that they lost their money  But if it is successful then the people that come later cry it is unfair for somebody to have so much. 

I guess overall, there is just a lot of crying by lots of people a lot of the times when the term "instamine" or "premine" are brought up. 

does it mean the value of the coin is relatively low if devs premined like 3% of it?

you will see negative comments about what they are OP
BUT.. IPO / ICO coins are even worse.

For example a dev could premine 2% of the coins total supply..
then another coin like NXT could premine 100% of the coins then try and sell them to you all.
there is a large risk dev's could do what ever they want with the coins they hold. (see Blocknet + million dollar cash grab)
i could post an IPO coin then spend the money and leave.
nothing to stop me from posting an ICO and then making bold claims about all kinds of future plans (regardless if they will be carried out or not)

i would be faaaaaar more worried about ICO/IPO style coins than i would premined coins.
I personaly won't touch them.

they would require trust in a variety of ways and in unregulated lawless market on site infamous for scams and 1,000's of clones
there is no reason what so ever why i should trust people posting crap here.. only gullible fools do !
as long as there is some guy behind the coin pulling the strings there is a large risk of dev exploitation

edit:
also watch out for other terms used for 100% premined coins such as Angel Investing or Crowd Funding (see: start coin)

Its when the owner mines like 50% of totally coins, heavily decreases the value.

Any conventional cryptocurrency is designed such that coins are created via a special transaction in a block known as a coinbase transaction.

All cryptocurrencies need to start with a genesis block - the first block.

All cryptocurrencies are currently designed whereby coins are distributed via reward mechanism to support the network.

premining is a way to circumvent this distribution to favor a specific group of individuals (or just one person). An instamine is a type of premine.

In premined coins, the genesis block contains a coinbase transaction that creates X amount of coins, and deposits them into an address - usually the developers. X can be any amount. This is the most honest type of premine.

In instamined coins, the genesis block does not contain a large coinbase transaction, but the first X blocks contain huge block rewards compared to the rest of the distribution of coins. Say, for instance, in the first 500 blocks, 50% of the coins are emitted, and the first 500 blocks are mined in less than one day.

there's also ninjamining. In this variant, the code looks good upon inspection, because there's no premine or instamine (which can usually be observed in the source code), but instead the publicly released mining software is deoptimized, such that owners of the optimized software have a mining advantage. Ninjamining can also be achieved by privately launching the cryptocurrency software before announcing it to the world. So if you and I started a coin, and we were the only ones that mined it, and then 1 month later we tell other people, thats a ninjamine premine.

In general, the amount of these types of mining relative to the total or current coin emission is what matters.

This affect very hard to the coin because is probably that dev can sell these as soon as this hit an exchange, Normally you could keep away of this kind of coins.

Edit: On some cases can exist a coin 100% premined but with  "fair" distribution and it is completely  different.

How does this affect the value of the coin?