From Bitcoin Cash to Bitcoin Private, Bitcoin Red, Bitcoin Dark, Bitcoin Plus and even Bitcoin Gold, you will be hard pressed not to find one of the so-called Bitcoin forks in the cryptocurrency market. Last year alone saw up to 19 Bitcoin forks, and if Lex Sokolin (Autonomous Research’s global Fintech director) is right, we might just see 50 more come out this year.
What Is a Bitcoin Fork?
To put it simply, a Bitcoin fork happens when a group of developers decides to clone Bitcoin’s software, re-branding the clone with a new name and possibly adding a couple of features as an improvement on the original. Since Bitcoin is an open-source platform, practically anyone can make contributions. However, as much as this is intended to enable contributions to the platform, it has most recently turned out to be an easy way of capitalizing on Bitcoin’s mainstream popularity and making quick money.
What’s Driving the Forks?
Well, it’s simply a matter of motive. While some developers and backers are out to make a profit with a Bitcoin fork, some have genuine reasons, and seek to contribute to and improve the platform. Perhaps the biggest motivation for creating Bitcoin forks is the fact that developers get new coins through a process called post-mining.
They can then collect their new forked coins on wallet platforms such as Coinomi and exchange them for the original Bitcoin before prices drop. This, unfortunately, has become the norm, according to Coinomi’s CEO George Kimionis. He is further quoted on Blomberg.com saying that “Looking back a few years from now we might realize that they were just mutations fostered by investors blinded by numerical price increases — rather than honest attempts to contribute to the Blockchain ecosystem”.
In his statement, he further predicts that Bitcoin forks may overtake Initial Coin Offerings as the new way for startups to raise money. After all, startups will find it easy to create Bitcoin forks, considering platforms such as Forkgen are enabling developers with rudimentary skills create their own forks easily.
Kimionis’ predictions are not entirely isolated. Other experts in the cryptocurrency space are also predicting that Bitcoin forks could pretty much replace some of the top altcoins in 2018. Experts such as Kimionis consider the ICO market flooded, given it reportedly raised over $3 billion in funding last year alone.
The Successful Forks
One only has to look at projects such as Bitcoin Gold and Bitcoin Cash (currently the fourth largest cryptocurrency with a market capitalization of $27 billion according to CoinMarketCap) that have shown the potential of a successful Bitcoin fork. Considering the scalability problems that Bitcoin is currently facing, there is no doubt that Bitcoin forking might quickly emerge as the new way to improve the platform. The question, however, still remains as to whether the community can move past attempts to “money grab”.
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