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.

Right off the bat, let’s get into some definitions so we are all on the same page when I move on to describing the pros and cons of each.

• Premine:
  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.”
  source
  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.

I will not be speaking about specific coins, instead I will be supplying you with the type of information required so that you can apply these concepts when researching coins yourself and you can come to your own conclusions.

I have to start with the negatives first because I think they are much more important to be aware of first before getting into any potential pros for this type of mining and coin allocation.

Cons:

The biggest con here for premined or instamined coins is the fact that one person or entity has direct control over exactly who receives coins and how much. More often than not, premines and instamines occur to benefit a few people.
When I say benefit, I mean turn them into millionaires or billionaires.

Centralizing the supply of a cryptocurrency is not in the best interests of those who did not benefit from the premine/instamine.
** It creates a high risk of that coin being easily manipulated on the markets. Additionally, when you bring into consideration coins that are associated with governance models, those select few suddenly have a lot of power over the actual network as well. **

The other side to this coin looks like this: You can argue that it is in the best interest of those who own a large supply of a coin to act in ways that facilitate its growth. But there is one issue with this logic, you are left trusting that the whales care about the coin and won’t just dump it on the markets and move on to the next.

Pros:

Premine: There are different reasons for the decision to conduct a premine that some may argue are “for the good of the coin”
For example, they may feel the need to allocate coins to pay for marketing, or for listing on an exchange which would help to bring more exposure to the coin and grow its community.

Instamine: Some will argue that those who are involved with mining at the very start of a new cryptocurrency should be rewarded for taking what some may consider to be a risk.

All of this being said, here are my two cents:

Premined coins have become very popular the past year or so. We are at the point now where coins that aren’t premined or held and ICO have an automatic gold star and seen as more authentic.

• Not every cryptocurrency is created equal, and it is details like this that will make or break a crypto in the long run.
• Be aware, continue researching and you will be a better investor and cryptocurrency advocate for it.

If you want to continue down this path to premined discovery, I highly suggest that you check out the many links I have provided down below, there are some good ones.

Additional Reading:

Definitions
Pros and Cons
Morgan Creek Capital stays away from premined coins
Founder of Ethereum’s take on premined coins
Compare to Proof of Work mining
Understanding the economics behind premined and PoW coins