Non-Mineable Coins

What is a non-mineable Coin?

People involved in the Bitcoin and crypto currency ecosystem are aware of the proof-of-work algorithm of Bitcoin. New coins can only be generated through a mining process. However, there are also non-mineable crypto currencies with great potential out there — such as IOTA, Ripple, Cardano, and numerous others — which are only bought rather than mined.

A PoS (proof-of-stake) type of algorithm doesn’t reward participants for solving complex crypto puzzles to validate transactions and build new blocks through mining. Because of a circulating supply, the more altcoins you can hold, the better chances you have to benefit from a high interest rate. The approach is much more streamlined for crypto currency fans. With non-mineable PoS crypto currency, you buy the token (“seed”) and you hope for the “seed” to grow up into a fully-developed tree with lots of “beautiful apples” (return on investment).

Non-mineable crypto currencies are those that are bought through wallets instead of being mined. In other words, these are the coins that are already in circulation and is commonly stored in crypto currency wallets. Because no mining is involved, verification of transactions happens through a consensus system by a selected number of trusted validators. The process does not incentivize participants with coin rewards and no proof of stake is required.

Most of these types of coins already have a circulating supply. With non-mineable crypto currencies, you get to earn interest by holding the crypto currencies in your wallet; the more coins you hold in your wallet, the better chances you have in getting a higher interest rate. Additionally, non-mineable crypto currencies are typically considered as pre-mined, meaning that they’ve already been mined even before it was made available for purchase.

Non-mineable crypto currencies can be highly valuable due to their limited potential to increase in size. This happens because of the constant supply. If we were to compare Bitcoin with IOTA, for example, IOTA’s overall price may increase because the supply is limited. The price of Bitcoin stagnates or devalues because new BTC have to be introduced into the market.

According to coinmarketcap.com, examples of Top ten non-mineable crypto currencies are Ripple, IOTA, NEM, NEO, Qtum, Omisego, Lisk, Stratis, Waves and EOS. These crypto currencies follow a Proof of Stake (POS) to verify transactions.