my thoughts, burning cotton will produce toxic fumes.
2 things keep the wick and coil assembly cool, air flow and liquid.
the coil is basically an air and liquid cooled heat powered atomizer.
the fuel injectors in your car are also atomizers but they use an electromechanical solenoid to push and pull a tiny valve open and closed very very fast and use some aerodynamic and hydrodynamic principles to achieve a "mist" of fuel that is then sucked into into the engine (combustion chamber). the Fuel injector is an example of an Atomizer that requires no external cooling forces...
so lets break down our wick and coil model,
we have a porous / fibrous wick. the small porous in the wick carry the e-liquid to the coil via "capillary action". basically fluids will always try to take the shape of there container and this case its the "container" is a network of microscopic tubes, channels, pores and VOIDS in the wick. these empty spaces are filled with air and when you take a drag off the e-cig you are lowering the air pressure inside these voids and allowing the e-liquid to take the place of the air.
lets look at the coil now,
you have kanthal wire. (you might use Nichrome wire but because im not well versed in its material properties i will not cover it here)
so kanthal is an Proprietary alloy of different metals, iron-chromium-aluminium. exact amounts used are not well known (Proprietary).
when this alloy gets hot it tends to expand and form a protective layer of aluminum oxide. this aluminum oxide layer is brittle and flakes off.
lets put it all together
so you have a porous wick that is carrying fluid to a heating coil. the e-liquid is energized by the heat and expands into a gas form. because e-liquid is a solution of a lot of different chemicals some of these chemicals break down into other chemicals before they are able to be vaporized because they got hung up in a spot that lacks air flow or they just got to much heat. This is what that black "gunk" is on your used wicks and coils. remember that the wick is porous and will trap particles from the burning e-liquid. so over time you have a build up of SOILD gunk in the pores of the wick taking up the area the e-liquid needs. the aluminum oxide layer will also start to pick up this gunk and eventually end up in the wick as well..
Amorous Silica (silica wick) has a very low coefficient of thermal expansion (CTE), well Kanthal (being mostly iron) has a CTE normal for most alloys of similar nature.
so when you fire your atty, the wick is not expanding at any significant rate but the wire is expanding. people who rebuild know that you want to wrap wire around the wick with a bit of tension but not so tight that you constrict the flow of e-liquid.
so are burnt hits "bad"??? well they are all kind of burnt hits in a way, some more burnt than others.. your not getting perfect / %100 Atomization in our situation. there will be by products of the process that will taste bad and the heat and or hot particles of vapor may cause pain. we don't really have any long term testing for e-cigarette usage, so we cant say if its "good" or "bad" for you.
i will say this... the grill marks people like to make on steak and other meat are carcinogenic..
