Instamine (Instamine) is a situation in which a significant part of the coins is mined in the first hours or days after the network's launch, before a wide community has joined the project. As a result, a disproportionately large share of the entire issuance is concentrated with a small number of participants, often connected to the developers themselves.
Sometimes instamine arises from technical peculiarities and errors in setting up the protocol: for example, too high an initial block reward or incorrect difficulty at the start. In other cases it is a deliberate scheme aimed at the self-enrichment of the creators through the early seizure of coins.
Why this is considered a problem
- An excessive concentration of coins with a narrow circle of holders.
- The risk of price manipulation by large owners.
- A decline in the trust of investors and the community in the project.
Because of these risks, instamine is usually perceived by the market extremely negatively and often becomes grounds for criticism or for refusing to support a project. A transparent and fair model of coin distribution, on the contrary, increases trust in a new cryptocurrency.
