The Future of Bitcoin: Premine

This time we have a coin, which is a look into the future itself. It is a very direct clone of Bitcoin with one change that gave it its name.

Hash algo SHA256
Premine 100%
Transaction Speed 10 min/block
Developers Competent

While this are the technical details, they did not really matter for its creation. The idea was to create a “Bitcoin” like the original Bitcoin will be in 2140. So while modern crypto-currencies have faster transactions speeds for a good reason, this coin just copied the “bad” behavior of Bitcoin.

What happens with Bitcoin in 2140? The block reward goes to zero. No new money is printed anymore. Why do miners continue to mine then? Because of transaction fees. The plan is that people pay enough transaction fees that mining stays profitable. So much for the theory. Premine set out to test this theory now. All coins were premined and randomly distributed to mimick Bitcoin in 2140.

How did the experiment turn out? Well, the coin is still here, so the basic concept is sound so far. Are miners motivated enough? Currently Premine difficulty is 1793. In comparison, Bitcoin difficulty is at nearly 4 billion. The difficulty and hash power is quite stable, so it seems to work out in terms of mining. A great side effect of the experiment is that a subtle bug in Bitcoin was discovered. It also shows that the developers are technically competent.

The technology is sound, but how good is Premine as an investment? Will it rise in value? It has no advantages compared to Bitcoin and certainly no advantages compared to more modern coins. Why would anybody want to use that coin? Well, most altcoins like Dogecoin are struggling to give a good answer to that question. The usual answers are “community” or “marketing”. Money is a very social thing, so these aspects might ultimately be more important than technical discussions.

Marketing-wise Premine is solid, but not spectacular. The website is well done. The social media parts seem to be covered. Community-wise Premine is ok. Due to its “this is just an experiment” history, the community gives generously. It is interesting how much infrastructure is coming up, when you consider the size of the community.

Conclusion: High risk. It is not a hopeless scam coin, but no high potential either. Personally, I like the developer-culture-feel.

(disclaimer: This review was suggested and generously payed for by “applecoin”)

7 comments

  1. Ryan

    Thanks very much for linking my story! I’m curious as to what the primary factor is in your determination of its risk, however. With PMC being as scarce as it is and its anti-inflationary nature, one could just as easily argue that its value is only on its way up!

    Just another opinion. Thanks again for the link, and best of luck!

    Reply
    • CryptoFrenzy

      You are a good writer. If you had a “Bitcoin” or “crypto” category, I would put it into my sidebar. Titles like “Entering Alt+ Characters in Linux” would probably unnecessarily confuse my readers, who are mostly looking for interesting coins.

      The value of a coin is not a function of its scarcity alone. Value is very subjective. For a short-term investment I can see no reason for a price jump. A marketing campaign or some feature announcements would be indicators here. Long-term I cannot see a reason how Premine can find its own niche, where it is better than any other coin. Its Like-Bitcoin-but-future approach makes it not innovative by design. As an investor you are hoping for some event which makes your investment profitable. As there is no sign of such an event, this coin is a high-risk investment.

      Does that clarify my risk assessment?

    • Ryan

      I can see that. I think it may be more useful as a possible store of value (complete speculation on my part) than it would as, say, a profit-minded trade commodity.

      I personally couldn’t tell you one way or the other if PMC will end up coming through with new features or what they may be. I guess that’s the fun in all of this though 😉

      I greatly appreciate your kind words. I haven’t gotten the site quite where I want it, but I can finally say it looks like it’s getting somewhere! Thanks yet again, and best wishes.

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