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Premine

At the launch of a coin or token it is indicated what the maximum supply of crypto is. For bitcoin it’s 21 million. This doesn’t apply to crypto that don’t have a maximum supply. Developers can choose to keep a percentage of the supply as premine to reward miners for there effort or to keep a percentage of the supply for self-enrichment, to spend on investors or to buy themselves in at exchanges to list the coin or token on the exchange. The listing will result in a price increase (pump) where the chance arises that the developer sells a part (dump) to gain profit for itself. It will cause a dramatic price drop. Better known as a classic pump and dump. Premine is therefore a criteria to be extra careful with. Enlighten yourself when you invest in crypto!

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