Worth Billions
Years ago, entrepreneurs drew on Bitcoin’s code to launch alternatives such as Litecoin 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 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, according to CoinMarketCap.com.
“Bitcoin Cash was successful, quite a lot of momentum,” Charlie Hayter, CEO of coin researcher CryptoCompare, said in a phone interview. “Now other traders try to see if they can pull off the same thing.”
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 about $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.
Miners -- whose computers and servers process cryptocurrency transactions -- have been helping create new coins, hoping for fat rewards. Bitbank and some Chinese miners were instrumental when Bitcoin core developer Jeff Garzik created UnitedBitcoin, which forked in December. Like many other forks, it can be mined using older gear that can’t compete with state-of-the-art machines on the Bitcoin network. So if UnitedBitcoin takes off, miners with older machines that support it will be minting money.
Little Miners
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.
Imagine “rigs set up in a garage,” Nick Dooley, a core developer of Bitcoin Interest, said in a phone interview. “Everybody has a graphic card, and most people can afford to purchase one that can mine a certain amount of coins.”
Even some of Bitcoin’s initial forks are getting forked, with Bitcoin Cash getting a proposed derivative, Bitcoin Candy.
Support from miners isn’t always enough to maintain a price. SegWit2x [B2X], a fork from late December, drew more than 10,000 miners, according to an email from one its creators. But B2X has been sliding, losing more than 90 percent of its value since Dec. 22, according to exchange Yobit.net.
“We provide our users with choices and let them decide which assets they are going to use and which not,” Coinomi’s Kimionis said. “We don’t make that decision for them.”
This article was provided by Bloomberg News.