With less bitcoin holders bothering to claim forked coins, the public’s appetite for chain splits is clearly diminishing. Developers, though, seem determined to keep pushing out fresh forks to a diminishing band of recipients. One of the toughest challenges that forkers face is finding wallets and exchanges willing to distribute the newly birthed coins. Large platforms have deemed the spate of fledgling forks more hassle than they’re worth, leaving it to smaller operators such as Coinomi and Bither to pick up the pieces.
Also read: After Segwit2x Failed Jeff Garzik Reveals “United Bitcoin”
Free Coins Come With a Price
Ever since bitcoin cash and bitcoin gold were born, there’s been a race to issue bitcoin clones, each claiming to offer some sort of improvement over bitcoin core. Forking a coin isn’t the only means of distributing a new coin; airdrops have also proven popular, particularly for ethereum-based tokens. Developers are especially fond of bitcoin forks, as they bring a ready-made audience of bitcoin users and cash in on the brand name. Any bitcoin holder is eligible to receive any bitcoin fork, but these ‘free’ coins come at a price.
Problems with claiming chain split coins first surfaced during the issuance of bitcoin gold: fake wallets stole users’ coins, with the total taken running into millions of dollars. The next major bitcoin fork, bitcoin diamond, received substantially less support, with Binance one of the few major exchanges to issue BCD to bitcoin holders. Like its older sibling, BTG, bitcoin diamond has been plagued by tales of stolen coins. To claim forked coins, bitcoin holders who possess their private keys are required to upload these to a coin split website. Should the site prove to be a scam, the victim risks losing the contents of their bitcoin wallet.
A Safer Way to Claim
A safer means of claiming forked coins is letting an exchange or wallet do the hard work. The downside to this is that it requires using an account which you don’t possess the keys for, an arrangement which comes with its own risk. The process of claiming forked coins from an exchange is fool proof at least: provided you have a bitcoin balance at the time of the split, you will automatically be issued forked coins, usually at a ratio of 1:1. However, many exchanges and wallet providers have tired of the additional work these forks demand.
Aside from the technicalities of claiming and distributing forked coins, there are deposits and withdrawals to process, and newly developed coins often have basic wallets that are still in beta. Given that many of the teams behind these forks are unknown and unproven, it is also hard to vouch for the project’s integrity. Forked coins that have been excessively premined (bitcoin gold) or whose developers elect to claim coins from inactive bitcoin wallets (united bitcoin) are controversial, and risk sullying the reputation of exchanges and wallet providers that agree to distribute them.
Binance issued everything up until super bitcoin before calling a halt, while Bittrex stopped at bitcoin gold, as did Bitfinex. Developers of subsequent forks have been forced to look to smaller platforms for support, and they’ve found it in Coinomi. The open source wallet, available on the Play and App stores, supports a host of altcoins and tokens, and has been only too willing to take on chain splits. Bitcoin atom (BCA) is the latest fork it will take on, a coin which comes with Segwit and Lightning Network support.
The wallet provider’s CEO, George Kimionis, tweeted: “Coinomi has helped millions of users already to claim their free forked coins with great success and continues to do so, becoming the ultimate choice for forks and airdrops.”
Fork All The Things
Bither, a little-known bitcoin wallet available for mobile and desktop, is now supporting bitcoin diamond on its Bitpie wallets. Smaller exchanges that are supporting BCD include Gate.io, Allcoin, Coolcoin, and Bibox. These platforms gain additional users who are seeking to claim forked coins, boosting revenue from trading fees in the process. Unlike most forked coins, bitcoin diamond was issued at a rate of 10 BCD for every 1 BTC. Given that each BCD currently trades at around $50, however, it is not surprising that many bitcoin holders have ignored the dwindling returns on offer.
Cryptocurrency exchange Gate.io has even supported bitcoin file (BIFI), a P2P file system that was distributed at a rate of 1:1000 after splitting from bitcoin at block 501,225. Each BIFI coin is currently trading for around 45 cents. For so long as developers can find platforms willing to accept coins and users are prepared to claim them, forking fever will continue in a race to the bottom.
Will you be bothering to claim new bitcoin forks? Let us know in the comments section below.
Images courtesy of Shutterstock.
Keep track of the bitcoin exchange rate in real-time.