Earlier this week, BitcoinTalk users began raising questions about premined CannabisCoins that remained unallocated. In response to the controversy, CannabisCoin developer DeltaNine burned the coins to an unspendable address.
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CannabisCoin Lights Up Premined Coins via Proof of Burn
Last week, CannabisCoin made news due to a massive price rise precipitated by the coin’s much-hyped Yes We CANN event at the Phoenix-based Herbal Wellness Center. This week, CannabisCoin is making headlines again but for somewhat more controversial reasons.
CannabisCoin launched in April as a Scrypt-based coin but transitioned to the X11 algorithm to avoid the impending release of Scrypt ASIC miners. Approximately 21.8 million coins had already entered circulation at the time of the hard fork, so developers premined those coins in the first X11 block and allowed their owners to redeem them manually.
Earlier this week, users on BitcoinTalk began raising questions about whether or not developers were still holding a large portion of these coins. Apparently, 14 million coins from the premine remained unclaimed by their owners. According to IRC screencasts posted in the thread, DeltaNine denied the coins belonged to anyone on the CannabisCoin team and gave the owners approximately two weeks to claim their coins or he would destroy them in a client fork. However, a fork proved unnecessary, for DeltaNine was able to find the backup files to the wallets holding the unclaimed funds (which he revealed contained 14 million CannabisCoins, not 12.5 million).
On October 22, DeltaNine sent the 14 million premined coins to an unspendable “burn” address and posted videos of the process on YouTube. The video below shows the destruction of ~10 million coins. He destroyed the remaining 4 million coins in a separate video.
The burn can be verified by examining the CannabisCoin blockchain. As the below screencast demonstrates, all 14 million coins now sit in an unspendable address.
CannabisCoin made the right choice by destroying the premined coins, which reduces the total supply and increases the value of coins already in circulation. Some people have tried to blow the situation out of proportion, alleging developers were hiding the coins from the community. This is not surprising. Altcoin developers have scammed communities many times before, so unfortunately people jump to conclusions when questions arise.
However, in this case the evidence does not uphold the scam narrative. DeltaNine was forthcoming during the situation, particularly when he revealed he discovered access to 1.5 million more coins (~$14,000 at current prices) than the already discovered 12.5 million. Regardless, the coins have now been burned, and CannabisCoin investors should rest easy that the situation has been dealt with appropriately.
How do you think CannabisCoin handled the situation? Comment below!
Disclosure: The author is paid in and holds investments in bitcoin. He is not invested in or affiliated with any of the altcoins discussed in this article. Any advice contained in this article is solely the opinion of the author and does not reflect the views of CCN. Neither the author nor CCN is liable for your investing decisions, so do your homework and never invest more than you are willing to lose.
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