What is a Post-Mine?
Post-mine is a term used to describe the process of creating new coins or tokens after a blockchain network has already been launched and is in operation. It refers to the creation of new coins or tokens that are added to the supply after the initial mining process has been completed.
Post-mining is often used as a method for funding development and other expenses related to maintaining and improving a blockchain network. For example, a blockchain network might conduct a post-mine to create new coins that are then sold or used to fund the network's development, marketing, or other expenses.
Post-mining can also be used as a way to address issues related to token distribution or to reward early adopters or supporters of the network. For example, a blockchain network might conduct a post-mine to create new tokens that are distributed to early adopters or used to reward those who have contributed to the network in some way.
One of the key benefits of post-mining is that it provides a way for blockchain networks to fund their development and improve their operations, without relying on external sources of funding. This can help to ensure the long-term sustainability and growth of the network.
However, post-mining can also have some drawbacks. One of the main concerns is that it can result in an increase in the supply of coins or tokens, which can dilute the value of existing coins and reduce their scarcity. Additionally, post-mining can be seen as unfair or unethical by some, as it may create new tokens that are not distributed fairly or transparently.
Simplified Example
Imagine you and your friends went on a treasure hunt and found a big box of candy. You all agreed to split the candy equally among yourselves, but one of your friends kept some of the candy for themselves after the hunt was over.
In the same way, a post-mine in cryptocurrency is when some of the coins that were supposed to be distributed among all the participants in the network are kept by some of the people involved in creating the cryptocurrency. Just like how your friend kept some of the candy after the treasure hunt, the people involved in creating the cryptocurrency keep some of the coins after the mining process is over.
In this analogy, the box of candy represents the coins that are created in the mining process, and keeping some of the candy after the treasure hunt is over represents post-mining, where some of the coins are kept by the people involved in creating the cryptocurrency.
History of the Term "Post-Mine"
The term "post-mine" surfaced in the mid-2010s, coinciding with the surge in popularity of Initial Coin Offerings (ICOs). As ICOs gained momentum, a distinction became evident between tokens pre-mined by project teams before public sale and those minted after the ICO, termed "post-mine." This distinction emerged in response to concerns regarding token distribution and potential manipulation by project teams, reflecting investors' interest in understanding the future token supply and the impact of post-mining on token prices. The term found its way into discussions and articles related to ICOs and token economics, gradually gaining wider recognition through project whitepapers, media coverage, and online forums where investors and enthusiasts deliberated on post-mining and its implications for token valuation and investor returns.
Examples
Post-Mine in Ethereum Classic: Ethereum Classic is a blockchain-based platform that was created after a hard fork of the Ethereum blockchain. The hard fork was implemented in response to a major hack that resulted in the loss of millions of dollars worth of Ether. The Ethereum Classic post-mine was designed to provide a stable source of funding for the development and maintenance of the Ethereum Classic platform. A portion of the total supply of Ethereum Classic was set aside for post-mining, and the funds generated from this process were used to pay for the development and maintenance of the Ethereum Classic platform.
Post-Mine in Ethereum: Ethereum, like Ethereum Classic, also uses a post-mine to provide a stable source of funding for the development and maintenance of the platform. The post-mine in Ethereum is used to fund the Ethereum Foundation, which is responsible for overseeing the development and maintenance of the Ethereum blockchain. A portion of the total supply of Ethereum was set aside for post-mining, and the funds generated from this process were used to pay for the development and maintenance of the Ethereum platform.
Post-Mine in Decred: Decred is a decentralized autonomous organization (DAO) that uses a post-mine to provide a stable source of funding for the development and maintenance of the platform. The post-mine in Decred is used to fund the Decred Treasury, which is responsible for overseeing the development and maintenance of the Decred blockchain. A portion of the total supply of Decred was set aside for post-mining, and the funds generated from this process were used to pay for the development and maintenance of the Decred platform. The Decred Treasury operates in a transparent and democratic manner, with Decred stakeholders having a say in how the funds generated from the post-mine are used.