Mintable tokens are ERC20-compatible tokens with one added feature: new tokens can be created at any time and added to total supply. Standard ERC20 tokens don't have this feature, which makes them a fixed supply tokens. Mint function is defined like this in Solidity: function mint(address to, uint256 value) public onlyMinter returns (bool) New tokens can be minted only by an address which is set to be in a Minter role. If no address is in Minter role, then no one can create new tokens.
Mintable tokens are widely used in combination with crowdsales. Crowdsale contracts are used to create an ICO where ERC20 tokens are sold for ETH. Here's the mechanism used for combining mintable tokens with crowdsale:
ICO maker deploys mintable token contract, giving him a Minter role
ICO maker deploys crowdsale contract
ICO maker transfers Minter role to crowdsale contract. Only crowdsale contract can mint new tokens.
Now, the crowdsale begins. Investor comes along and wants to invest in new tokens. He sends ETH to crowdsale contract, contract mints brand new ERC20 tokens at current price and sends them to investor. When crowdsale is finished, no one can mint more ERC20 tokens, not even crowdsale contract, since it's coded that way. Investors can be sure that no one can dilute their share of token holdings.
Minting is not the same as mining. This is a common misunderstanding when people are talking about cryptocurrencies. Minting tokens is done by sending a transaction that creates new tokens inside of token smart contract. As we have seen in What are mintable tokens, a call to a smart contract function can create unlimited number of tokens, without spending energy. On the other hand, mining does create new tokens, but is usually limited as per concensus rules of that blockchain, and requires spending energy. Mining also serves other purposes like securing the network and packing new transactions into blocks.
Nadcab Blockchain - Minter role is an address that has a special privilege to create new tokens, thus adding them to total supply. There could be multiple Minter role addresses, but in practice, it's usually just one address. The first Minter is the address that deployed the token contract. Current minter can add new minter, renonunce his privilege to be minter, or transfer his right to other address.
Tokenization of all things, for the most part, has a positive and bright future. Mintable tokens are fantastic. On a more technical level, it’s worth noting that Mintable tokens can help with a range of commercial scenarios.
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