Post-Mining is a process in which the creator of a cryptocurrency token or coin returns to their own account some fraction of all coins created. This can be done by either burning unsold tokens or releasing newly mined tokens back into circulation, depending on the type of cryptocurrency being used. Post-mining also refers to the continuing issuance of new tokens as an inflationary measure, such as Bitcoin’s halving system.
The purpose and motivation behind post-mining varies greatly between different cryptocurrencies and projects, but generally it is done with the aim of incentivizing early adopters who join a project at its inception stage while discouraging malicious actors from attempting to take advantage of the network due to its immaturity.
In many cases post-mining serves both as a reward for early adopters and miners that are willing to take risks investing time and resources into proof-of-work (PoW) networks before they become established, while also ensuring that those same individuals remain invested in order to ensure security across the network over time. It also allows for more consistent distribution among users so that there is not excessive concentration within one individual or entity.
For example, Ethereum’s founder Vitalik Buterin has famously stated: “If [Ether] was distributed completely randomly then most people would have no incentive whatsoever to participate in mining … By providing additional incentives for mining we hope to make sure there will always be sufficient miners participating even after Ether’s price drops substantially.”
Ultimately each project must decide what form of post mining best suits their goals and development plans based on factors like market conditions, user base size/demographics etc., but it can serve an invaluable role in helping secure nascent blockchains until they reach maturity.
