For those not in the know blockchain forks are something of an enigma. Last year saw 19 Bitcoin forks but as many as 50 could occur this year. The most successful one at the moment is Bitcoin Cash which has caused a rift in the Bitcoin core community.
Forks happen when developers clone Bitcoin’s software and release it under a new name with a new coin and often new and improved functionality. In late 2017 in addition to Bitcoin Cash there was Bitcoin Gold, Bitcoin Diamond, Bitcoin God, Bitcoin Platinum, Bitcoin Dark and the list goes on. It is no wonder that confusion reigns with all of these different versions of the digital asset.
What the fork
According to India’s Economic Times there could be as many as 50 more Bitcoin forks this year. A site called Forkgen, which enables anyone with rudimentary programming skills to launch a clone, could see this estimation rise. The motives behind the forkers vary, some want to improve on Bitcoin’s slow and expensive transaction times. BCH is a good example of this as they increased the blocksize from BTC’s 1Mb to 8Mb enabling faster and cheaper transactions. Others just want to latch on to the Bitcoin name and make a fast buck.
CEO of forked coin wallet company Coinomi, George Kimionis, commented;
“Unfortunately, most fork-based projects we see today are more of a sheer money grab.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.”
He predicts that all of these forks could sideline the ICO industry which generally creates new tokens. Forks can also help funds in countries that have banned ICOs such as China. Another advantage of a fork is that Bitcoin holders usually get an equivalent quantity of the forked version. Though this largely depends on whether their exchange supports it, and many do not.
Meet the forkers
Tech savvy entrepreneurs launched forked versions of Bitcoin back in the day when crypto land was largely a digital desert. Coins such as Litecoin and Dogecoin were born but they are now dwarfed by the likes of Bitcoin Cash which has a market capacity three times both of them combined. Traders and investors have seen this momentum and want to get on their own forked train to rake in the big bucks.
Miners are also keen for new forks since Bitcoin is now prohibitively expensive to mine for individuals and smaller operations. UnitedBitcoin for example, which forked in December, can be mined using older hardware that can’t compete with state-of-the-art machines on the Bitcoin network
The likelihood of many more forks in 2018 is high, only time will tell which ones make it to the top.