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What is Premining

Premining is a system where the developer assigns a certain amount of currency credit to an address before the source code is released to the public. This is done to cover up the expenses of some fees like listing in exchanges or developing of core features say of block explorers.

Premining is good for the developers as it gives them the power to use it for publicity i.e. use it for promotions, give as gifts etc anything to strengthen the coin. They can use the currency for buying some tools and resources like graphic designs, hosting etc.

Premining is used in three variants. One is the 100% premine where there is no mining at all. It is deemed a necessity and considers mining a waste of resources as it consumes lot of electricity.  The second variant is the small-premine group where the developers hold a good share of the coins. It however is the riskiest variant too among the three. The third variant is the zero-premine which is rated as the ideal as it controls dumping of coins by developers.

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