Bitcoin May Split 50 Times in 2018 as Forking Craze Mounts

Bitcoin God arrived last month. Bitcoin Pizza was delivered in January. Bitcoin Private’s issuance date is... still a secret. According to Bloomberg, 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. A fork’s main advantage lies in sprouting from Bitcoin, the world’s most famous cryptocurrency. In a typical fork, all existing Bitcoin owners are eligible for the forked-off coin, giving the new asset a potentially huge number of users. Most coins arrive with at least some name recognition, because they bake “Bitcoin“ into their moniker.

A fork can often make millions for its developers as well as the server farms running and supporting the new software. Bitcoin Gold distributed 100,000 coins, currently worth almost $190 apiece, to an endowment funding its ecosystem and development. About 5,000 of those coins went to the core team that created the fork. If the coins appreciate, that’s a boon for the developers as well.

Many of the new forks are looking to lure mom-and-pop miners, who’ve been pushed aside by industrial server farms. Some forks allow GPU mining, which means anyone with a graphics card can potentially participate. Even some of Bitcoin’s initial forks are getting forked, with Bitcoin Cash getting a proposed derivative, Bitcoin Candy.