Most coins which announce a Premine get ridiculed instantly by some trolls, but is there ever a time when a Premine is justified?
Having no premine, fair block rewards, with a fair announcement, can leave most devs virtually coinless for all their hard effort. The coins are held by big mining bag-holders or lucky speculators who manage to scoop up chunks when the coins first hit (or get dumped carelessly) on an exchange.
Coins without premines often have massive block rewards at the start, as devs try to compensate themselves for their hardwork and effort. Massive block rewards and super random blocks can often overly enrich the devs and early miners who steam in to mine the coin. The worst case scenario can also occur where the devs are able to mine some coin at the start, but are soon crushed out of the process by massive miners moving in and sucking out all the coins.
Ironically a premine stated when a coin is launched, is far more transparent than dishing out massive early block rewards. Mining a coin in its early weeks is always going to be beneficial as the difficulty is low and the hashrate too.
A situation whereby there is a Premine Coin Development Fund may solve these issues, the fund should be transparent and the rewards for work needed should be acceptable.
Coins need marketing and pr, they also need exchanges and down the line who knows what hurdles will appear, a coin with a foundational development fund should be able to navigate these hurdles better than those with none.
Some coin holders are sitting around waiting for the devs to do everything, the devs ask for donations but receive the bear minimum in some cases, the coin bobbles along without reaching its full potential, and everyone loses.
Crypto coins have such huge potential. Without getting into the possibilities of what lies ahead through Ethereum and other similar potentials for cryptography, at the moment what Altcoins mainly offer is a new type of financial product. This is often overlooked or somehow considered dirty, however the dissatisfaction with banks and the present financial system is at the forefront of everyones minds.
Bitcoin is brilliant in that amongst other things it offers a new kind of payment system which cuts out the middlemen. There is also space for Altcoins to create solid and lasting financial products with value. Examples could be the local crypto coins, pushed and supported by local communities and held as a safe store of value by investors across the world, and also coins which have a solid niche or offer a real world product or service which you would need to own that particular Altcoin to use.
Ultimately the longterm success of any alt will depend on it's community of supporters and traders. The foundation of these coin communities are the developers who created and who nurture the coin through its existence. These dutiful devs deserve support and deserve reward for their labours.
Yes Premine is a dirty word in the crypto community. A Premine misspent or dumped on fledgling investors is a great travesty. However for the right developers a Premine Development Fund which can help them grow the coin and sustain it for the long term should be supported and accepted by all.
( from my blog:
http://altcoinspeculation.com/in-defense-of-a-premine-coin-development-fund/ )
