It is no coincidence that three of the 10 coins with the worst performance of this year are all Bitcoin Forks : Bitcoin Gold, Bitcoin Diamond and Bitcoin Private are down more than 90%. However, not all forks gave negative results: Bitcoin Cash remains one of the top four coins by market capitalization and the first three by 24-hour transaction volume according to Onchainfx. In many respects, it was BCH's success that fueled the excess of forks that followed, their developers observing the potential benefits of launching a new cryptocurrency under the Bitcoin banner.
While Bitcoin Cash forked sufficiently without pre-mine, the same can not be said of Bitcoin Gold. Then there was Bitcoin Private, whose developers, led by Rhett Creighton, made their money by uploading to Zclassic before announcing the fork. The failure of high profile forks such as BTCP and the disasters' BTG, which created many more losers than the winners, played an important role in dampening the public's enthusiasm for the forks.
There is more than one way to forge a coin
Forkdrop.io is one of the main resources for monitoring cryptocurrant forks. He produced a guide detailing the number of Bitcoin forks and their fate to date. He explains: "There are 96 Bitcoin fork projects in total, of which 69 are considered relevant active projects for Bitcoin (BTC) owners, while the remaining 27 are considered historic and are no longer relevant. of fork of altcoin that have some resemblance to the projects of fork of Bitcoin, but they have their inheritance from an important altcoin. "
42 of these projects have active blockchains that can be used for transactions, while another 27 are presumably under development. It remains to be seen, however, what kind of traction is achieved with coins like Bitcoin Pizza or Bitcoin Holocaust. 41 of the Forkdrop.io coins has data on were created as a straight fork, in which the newly born coin shares the same story as its parent BTC. 22 were issued as passive or active aircraft and six others used a combination of these methods to distribute the coins. After Bitcoin, the most commonly bifurcated cryptocurrencies are Ethereum (7 fork), Monero (5) and Litecoin (4).
A Short Study of Cryptonetwork Forks
In a report published this week, Placeholder VC took a deep dive into bifurcated coins and came to similar conclusions to Forkdrop.io, noting that "The vast majority of the resulting child networks from chain forks are disused and have lost significant value compared to their parents' networks … Users and developers tend to remain loyal to the original network, while most miners are loyal to the economy, directing hashpower to the most profitable network of the moment. "
The placeholder VC finds, however, that" Despite the lower usage metrics, the child networks exchange higher user value and transaction multiples (for example, NVT report) than their mother networks. " It concludes: "Contrary to the narrative of bifurcation without frictional value of aspiration away from large networks, the chains of children to date have struggled to attract the application and talent of developers from their mother communities."
Just like the folly of tokenization diminished once the ICO market collapsed, the same happened with forked coins. The last time someone checked in on the ZLC / BTCP flat rate, Rhett Creighton, he had quietly abandoned his plans to do the same with Primecoin to create Bitcoin Prime. Developers of new altcoins, forked coins and blockchains trying to create a better Bitcoin have learned that Bitcoin is not easily upgradable. As Omar Little of Wire said, "Come to the king, do not lose yourself"
Do you think there are valid arguments in favor of forking coins and why do you think so many forks have failed? Let us know in the comments section below.
Images courtesy of Shutterstock, Onchainfx and Forkdrop.io.
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