Bitcoin Forum

Ive been reading some pros and cons to being fully premined coins and would like to hear your opinions.

I think the biggest advantage of premined coins is the it can be released out to the public a lot easier without the need for miners to continually spend 1000,s of dollars in equipment that has a very short lifespan due to mining/power consumption/difficulty.

I also believe that it bypasses the need for the "techie" group to be directly responsible for its release which ultimately they profit from by being "early adopters"

because centralized. 

How do you figure that out?
Its centralized only to miners and from there it spreads. So theoretically miners can band together and put a stop to selling of Bitcoins.

Gotta love Preminecoin

It can easily turn into scam after funds are collected  ::)

But any savvy business person will see the better returns from continued expansion of a coin.

The scammers are only fly by night thugs and quickly vanish

There are plenty of such coins. What improvements do you offer?

As above.

Depending upon what the coin is about and what it proposes to do for a specific or a general part of the world. The values of the coin and it's developers. Information on the team behind it etc, etc,etc. These and lots more things need to be discussed and documented before people will even begin to weigh the pro's and cons of a premine coin. Especially a fully premined coin.

I think it's just a scam if the dev keeps most of the coins and dumps whenever it suits him.

However, there are a few fully pre-mined coins I like because they are widely distributed between a thousand or more people without the dev keeping the majority.

It's centralised because it's 100% premined. How do the devs share it out in the first place?

I like them if there is an innovation. It´s just like a normal company doing her IPO.

We need innovation with superior programmers. 
The shitcoins mining pump and dump - die game, is just a game with no future.

this topic is lame. who the fuck wants a 100% premined coin.

this: https://bitcointalk.org/index.php?topic=535152.0

which miner wants a 100% premined coin? None

non-miner? Absolutely

My guess is someone that is not a techie, cannot afford 1000's of dollars in miners and people who just want day 1 coin who know little or nothing about crypto, mining and computers

aka "a sucker's born every minute".

people who:

know little or nothing about crypto,

little or nothing about mining,

little or nothing about computers,

have no business investing. i'm continually amazed how little research people do into their own investments. people that don't bother educating themselves won't make money here:  you've described the perfect conman's mark.  

It is my opinion that no good can come from such a thing as the first will very more than likely get a larger share of the pie and those who show up late will get scraps and basically be working for the early adopters in a sense.

So your suggesting the Bitcoin remain in the hands of those that know about crypto, mining and computers... That just ruled out 99% of the world

i'm suggesting that people that 'want day 1 coin' and expect to make money without doing any research whatsoever are the reason why scams are so prevalent in this subforum specifically.  

if you know "little or nothing about crypto, mining, and computers", then why not invest in something you fucking know something about?  

So day 1 coin should remain with crypto, miner and computer people?  ... Doesnt sound like a community at all... sounds like a club for the elite

Yeah this statement seems about right.

oh no "information" and "knowledge"  make people elite.

the entire fucking planet is a club for the elite.  welcome to earf.

No... you said people who only know Crypto, Mining and Computers should be for day1.. Has that changed now to include a broader range of people?

So which ones shouldn't be allowed to have day1 coins? Maybe that is an easier question

that's not what i said.  I stated:


you claim this is elitist.  i think knowing something about what you're investing into is smart investing.  

people that know nothing about what they're investing will get scammed here. 

So if I dont know crypto mining and computers, I have no business in investing?

I hope some of those the invested in Bitcoin years ago and didnt know your 3 criteria, realize what a mistake they have just made... better give those coins to crypto people who know how to manage it properly... -sic-

correct.  i'm glad you are getting this after the third time.


there's a big difference between what i said, and what you're discussing.


i'm saying that without basic knowledge about cryptocurrencies, low-information investors will get conned.

read, comprehend, then post.  



this too.

Oh, the original post was made by what we refer to as "dumb money".  I see.  If you have no idea what you're doing, buy Bitcoin and hope for the best.  If you know what you're doing, you can buy other stuff and make or lose 1000% in one day.

100% premine is ok for experimenting with distribution models (after all pow was only meant as a shortterm solution for btc). However no one has successfully done a 'fair' distribution yet and very easy to scam for devs, or gamed by others.

PROS  :D:
After coin premine and distribution you would need nodes to perform transactions, but you could keep difficulty low and just have mining done by clients wallet on CPU. Client wallets on laptops could be active mining nodes forever. YAY!

CONS :-[:
A pre mined coin is too easy to produce. Anyone could fork Bitcoin tonight and pre mine 21M coins. And so it is worth very little.

It's like saying, let's not bother with gold, all the environmental pollution the mining causes is terrible! Instead of gold lets just use something else, so instead of 1Oz of gold you can use 1Oz of gravel... I have 10 tons of gravel in my truck, let's all use that.

Even if you did succeed and get it off the ground then thed network difficulty would be so low that a bigger chain fork could be created with modest hardware.

Thanks kelsey for a mature reply. I am only guessing, but I think a lot scams are being done by the crypto/computer crowd who dont see the value in a long term business model and only concern themselves with a quick buck at no work effort.... inputs.io was run by a kid... MtGox was run by a computer guy with no business acumen and I would guess again, that most on this forum members are kids... I dont see much maturity here at all

The CoinSummit in San Francisco pointed out some of the problems with Bitcoin as it is now.
That being the inexperienced people running all these platforms.

Perhaps they should stick to their crypto, mining and computers and let proper business managers and investors oversee and manage these people.

The Federal Reserve discovered a scam that they could create currency out of thin air and issue it for profit.  Random Bitcointalk members discovered they could issue premine and IPO scam coins for self profit.  The cycle continues.

It has pretty much nothing to do with "kids".

Fair comment. I understand that premining is easy and it would be the distribution and the platforms it runs on that would make it viable.
As for your other comment... Unlike gravel, premined coins just cant be picked up off the ground... Limiting production would eventually make it valuable. I think the Apple II has only risen in value, not because it a powerful machine, but because its a rare commodity now and for all intents and purposes, could act as a currency.

The kid comment was only to explain the screaming and attacking that goes on here. Civility helps communication more than yelling matches  ;D

It was kids/young people that started Napster, Apple, MS and so on and I don't in any way mean to devalue their efforts.

It was only when Steve Jobs matured, did he make better business decisions and got control back of Apple... Gates, well he was just a business guy to start off with.

It would be easier for me to aquire 21M premined MyCoins than it would be to aquire 21M pieces of gravel. So In a way gravel has more worth.

My point is that when the coins are first premined they are worth nothing globally. Of course they would be worth something in the optimistic eyes of the creator, and he would have to convince others of their worth.

You would need a lot of "clout" to get a premine to ignite, you would need massive media expenditure. I would think only a government or large corporate entity could be successful at igniting a premine.

If it did take off: the network hashpower to capital ratio would be too low to secure the coin against large fork attacks.

I think "Expensive" things are not easy to produce and/or mantain.

I don't like 100% premined ~ centralized coins, because I think coins as BTC etc are worth something because of the fact they are decentralized.

Because no one, no government or agency or party can directly affect your wallet, it has some advantages.

OP: Hey miners ... f*** you here is a 100% premined coin. Enjoy your minuscule transaction fees! You ain't getting any honey from my coin ma ha ha!
Miner: Tap tap tap
OP: What you doing?
Miner: Configuring my rig to point to a more profitable coin, say DOGE
OP: Cool whatever.
OP: Oh why can't I send this transaction been waiting 2 days now. Scratches head.
Tech Friend: Check the network hashrate. It is zero.
OP: What does that mean?
Tech Friend: No one is mining.
OP: Why do I care. I hate miners, I am a preminer. A 100% Preminer.
Tech Friend: Miners are required to confirm transactions. They are rewarded with coins for their blocks.
OP: Oh so I need miners.
Tech Friend: Yes
OP: So maybe I leave a few coins for them?
Tech Friend: Yes
OP: So 100% premine not so good?
Tech Friend: Got it.

Definitely, centralisation won't work for humans, one monkey ALWAYS takes advantage.

But, even if a premine were somehow fairly distributed evenly to every person on the planet, so the centralisation issue were null and void, premine would still be vulnerable due to relatively weak network hash power.

Every wallet owner could be a miner (transactor), the original bitcoin client had a CPU miner in it, when the DIF was very low.

So in theory a 100% premine would not need miners, instead every wallet owner would hash transactions, it would run pretty sweetly, that is until someone did a nefarious large fork.

So yes, you need big rigs mining at high DIF. for a secure network. the network hashpower needs to be proportional to the coins total capital.

Any premine that becomes successful and has low difficulty will get robbed, guaranteed!

Thats very interesting.
But mining is getting ridiculously expensive and such a short term project unless large capital investments are made monthly. Im not sure what a KnC jupiter makes now, but I do know what it cost. And mining long term is really profitable for manufacturers and of course the power company, which brings crypto back to the Corporations power, which is what Bitcoin wanted to avoid... correct?

Then there is the exclusivity of day1 coin, which would flow from miner and then out to "similar interest groups", that would then shuffle that out again to other similar interest groups, before eventually hitting the mass population.

Premining if marketed properly could bypass techies completely and hit the mass market quicker than a Bitcoin does.
Setting up wallets, ATM,s etc to confirm transactions could also collect those transaction fees and pass them back as "interest" to the first x confirmers and that would mean that your interest is based on the time your device is left on. As difficulty would not be an issue anymore, I would suspect those transactions to then get processed a lot quicker

Can you explain the last comment? I thought the coin was secured by the crypto and not the hashpower behind it.

Doesn't the original poster realize this propaganda he's pushing for a 100% premine coin has already been fulfilled?  It's called NXT and everyone hates it except the 30 people that own it.

Yes, mining is a free running market, a cold heartless beast like an arms race, those with the cheapest electricity will win.

But because of this Bitcoin has 470742.89 petaflops of computing power behind it, that makes for a VERY secure "lock" on the vault.

A premine, having less initial miner incentive, will find it difficult to become secure.

A running coin continues "mining" even after the last coin is mined.

In BTC: Transactions get pooled into blocks every ten minutes and then miners all compete to hash it with a salt such that the generated hash has a set number of zeroes at the start, the more zeroes the higher the difficulty, the more hashpower needed on the network.

hopefully by the time the last coin is mined then transaction volume is high enough that a secure network can be mantained.

Cryptocoins are a distributed P2P network using general consensus to keep things straight. Now in a low difficulty coin it is easy to make a fictitious block and fool the entire P2P network that you (or your group) have the truthful majority blockchain. In which case the whole thing is fucked, who has the truthful blockchain, no way to know?

Thanks for the enlightenment g4c :)

It reckon it is hard enough to convince someone to run the full Bitcoin client over a lite wallet like Multibit, because they don't want to wait and use up their bandwidth.

You expect people to not only download the blockchain but have their PC get hot and grind to a halt mining this coin, for no reward.

And yes 51% attack non withstanding :-)

Why doesn't anyone get it! We don't need any of these alt-coins. Satoshi got it right. Every parameter. The only alt-coin thing I am willing to maybe except is proof of stake to save energy.

Well, those that did maintain the blockchain and hash transactions would be rewarded with transaction fees. Free market would find the percentage who bothered to do this. I don't know the percentage that would need to run a full node, but it would probably get by with as little as 1% or so (maybe someone knows?)

but yes it's the crux of the problem, like chicken and egg logic:

[1]need to increase network size.
[2]need to attract full nodes.
[3]need to reward full nodes with transaction fees.
[4]got too few transactions... goto[1]

Incidentally, bitcoin will become a premined coin, when 21M coins are out. But by that time we hope transaction volume will be massive and the system will sustain.

We don't need to "get it" the free market decides, not us. But I am in agreement with you, premine will not be able to compete against mined during growth phase, thus it's pointless trying.

I would hate to know what the DIF would be in 2140 or even 2020 for that matter.

So premine now is what Bitcoin will be in 100ish years from now... I never looked at it that way.. I just looked at it as "all out"

very high, all going well, all electric heaters might be some hashing array? perhaps a nanotech way to grow hashing circuits, even electric water kettles and heaters might have hashing elements?


Yes, but BTC will (hopefully) have massive network.

Ok.. great to know all this stuff...

So for arguments sake, lets assume premine and its being distributed at a controlled and equal amount with limits on quantity.

Would this stop or slow down the premined coins volatility when these misleading articles about countries banning coin are made?
When China made an announcement, it had am impact on the coins price, so someone in the USA was directly effected by what China does or does not do. And why China? Is it due to them having the bigger mining rigs, that meant that more coin was in circulation in China?

Consider a premine, somehow cleverly distributed evenly amongst all those with internet access. (which is "unfair" globally, but that's another issue).

The moment that premine hits their wallet then what's it worth?

It's initial price would be 100% speculation, their would be no existing utility to anchor it to the "real world".

One might create an exchange for fiat or other coin, to see where buyers meet sellers, the market would be purely speculative.

In a 100% speculative state, a coin is most vulnerable to misinformation, misinformation spooks the mind that speculates. So at the moment of complete premine broadcast it would be at its most vulnerable.

It makes more sense to have a coin evolve slowly, gaining utility at a rate proportional to network growth. The utility can be thought of as a floor underneath the volatile speculative price chart. I'm not sure on the utility/speculation ratio for BTC at the moment but it's significant.

Free market is very similar to genetic evolution, to think one can shortcut evolution is short sighted, the optimal solution can not be created. It must grow and find it's path naturally, otherwise it WILL be put on the wrong path. Bitcoin will still undergo alot of evolution before last mined coin, the idea of trusting Bitcoin is slowly growing in peoples minds.

I would go so far as saying: If one wanted to ensure the success of a premined coin, then ALOT of centralisation and HARD control of users would be needed, because as you allude to, you would be battling for the minds of the users against large entities. Perhaps the only organisations that could successfully launch and run premines would be governments or massive corporations.

Perhaps you meant: dribble the premine out fairly, each new user gets a free amount.

We will assume somehow you have a magic distributed and trust free mechanism to prevent any single person getting multiple freeloads. Like some country coins are issuing against proof of national ID, which needs all users to trust a single entity by the way.

But again you have the 100% speculative market for the coins first entrance. That coin freeloads into users wallet, what's it worth to them, well less than the last breath they took, they got it for zero, anything they can sell it for is a profit right.

I think premine will always be a recipe for a sad looking chart, unless you had the power and influence to mega pump the coin for a long time, you know... set up a new Hollywood etc. to keep the dream alive, like it's done for fiat money.

With mined POW coins the miners are the first owners/sellers, they set the sell price in order to get ROI for their gear. It's an anchor to the real world.

100% scam  ;D

i like 100% premined coins... :)