Bitcoin God arrived last month. Bitcoin Pizza was delivered in January. Bitcoin Private’s issuance date is… still a secret.
They’re just a few of the growing stable of so-called forks – a type of spinoff in which developers clone Bitcoin’s software, release it with a new name, a new coin and possibly a few new features. Often, the idea is to capitalize on the public’s familiarity with Bitcoin to make some serious money, at least virtually.
Some 19 Bitcoin forks came out last year – but up to 50 more could happen this year, according to Lex Sokolin, global director of fintech strategy at Autonomous Research.
Ultimately, the number could run even higher now that Forkgen, a site enabling anyone with rudimentary programming skills to launch a clone, is in operation.
In a Jan. 14 tweet, hedge fund manager Ari Paul predicted more than 10 percent of the current value of Bitcoin and Bitcoin Cash will reside in new offshoots.
Motives behind the efforts vary. Some backers try to improve on Bitcoin. Others seek a quick profit. Developers typically score a cache of newly minted coins in a process called post-mining. Yet prices don’t necessarily hold up for long.
“Unfortunately, most fork-based projects we see today are more of a sheer money grab,” said George Kimionis, chief executive officer of Coinomi, a wallet that lets Bitcoin owners collect their new forked coins.
“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 forking may soon sideline a more popular alternative, initial coin offerings, in which startups raise money by selling entirely new tokens. That market has gotten crowded after raising about $3.7 billion last year, and smaller offerings have struggled.
