Some 19 Bitcoin (EXANTE: Bitcoin) forks came out last year, and up to 50 more could come this year, says Lex Sokolin, global director of fintech strategy at Autonomous Research, Bloomberg reports.
Motives behind the fork 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 said.
Kimioni predicts forking may soon sideline a more popular alternative - ICOs - in which startups raise money by selling entirely new tokens.
Ultimately, the number of forks could run even higher now that Forkgen, a site enabling anyone with rudimentary programming skills to launch a clone, is in operation.
“Bitcoin forks are kind of the new altcoin,” Rhett Creighton, who’s working on the upcoming Bitcoin Private fork, said in a phone interview.
“We are going to see now a bunch of Bitcoin forks. And they are going to start replacing some of the top hundred altcoins,” he added.
Years ago, entrepreneurs drew on Bitcoin’s code to launch alternatives such as Litecoin (LTC/USD) and later Dogecoin, seeking to differentiate themselves in name and often in features. But while Dogecoin now has a $770 million market value, younger clones Bitcoin Cash (EXANTE: Bitcoin.Cash) and Bitcoin Gold already dwarf it.
Bitcoin Cash, launched in August, is now the fourth most valuable coin, worth a total of about $28 billion. Bitcoin Gold is 15th with market capitalization of over $3 billion, according to CoinMarketCap.com.