Premining devalues future work done on a cryptocurrency because the underlying idea is to decentralize money, and the coins found at the start of a blockchain are easier to generate because the target difficulty for finding a block is significantly lower.

The most famous case of premining I can think of is https://en.wikipedia.org/wiki/Coinye (ltc clone), where people started mining it after dogecoin began. Dogecoin was in its first few weeks of release and had an extremely active number of miners; and was even more profitable to be mining than bitcoin at the time. There was speculation that having a celeb figure attached to a currency could bring the cryptocurrency movement mainstream; but when the block explorer for kanyecoin was released it was found that a very large number were premined by the developers, and few people considered it was worth dedicating mining time towards. The devs basically dumped all of their coins onto an exchange and abandoned the currency soon after. Premining is bad for building up a community of miners towards which an altcoin can be established for both trust and future earnings.

Zcash gets %10 of the mined coins for the first 4 years and %1 goes to a foundation. This is their business model. It seems reasonable to me... using the currency you're creating to fund the development of the currency.

If Zcash ends up worthless, then they won't have captured any value.

Since it's not a pre-mine it's not subject to the pump-and-dump dynamics of a pre-mine... it will take 4 years and the coins will have to be valuable over those four years for them to net anything.

It's a reasonable approach to aligning the companies interests with those of the users.

I'd love to hear a better one though, if you know of one.

Thanks, MCRed. Yeah, I worked long and hard on this, and this (https://z.cash/blog/funding.html) is the best idea I could come up with. And yeah — if anyone else reading this has any better ideas, I would love to see you try it! If it helps, you could start with a copy of our source code (https://github.com/Electric-Coin-Company/zcash/).

I would love to see your source code get audited by a third party. I have a lot of faith in your cryptographers, but your methods are harder to grasp than bitcoin and thus harder for me to audit myself-- I admit, I don't have the crypto skills.

It's economically impossible to create a sustainably decentralized currency. Ultimately it will come to be controlled by whoever is most connected within the network.

Here's hoping we see much better means of facilitating polycentric currency systems that render individual currencies no more than "dumb pipes" for anyone who wants to use more than one.