A premine is a process where the originators of a new coin mine it before the chain is open for general mining. This approach has been used for a number of coins, and for different reasons. For example, Auroracoin was premined and the premine was mostly distributed in an airdrop to Icelanders. In some cases this is easily justified.

However, a premine is generally not a good idea as it can be used to hide spending and abnormally reward coin developers. Thus, even with the best intentions, coin developers will need to go to extreme lengths to explain why their coin has a premine.

If a premine is to be used, it needs to be implemented as openly as possible.