Bitcoin Pays Dividends
Over the course of this year bitcoin has shifted from its function as a currency towards being a dividend paying asset like a stock. Dividends come in the form of hard forks like BCH or BTG as they use the history of the original BTC blockchain and reward previous holders of BTC with new and free hard forked coins.
Besides the increase in Bitcoins price alone, holding the forked Bitcoin Cash or the recently forked Bitcoin Gold up until now would have netted you about 1,660 % in total gains year to date, which is 300 % on top of Bitcoins year to date performance (1,360 %).
This sort of dividend attracted investors and pushed Bitcoin’s price even more as they see a speculative potential for more hard forks and free forked coins for them to grab in the future.
(Hard) forking was different in the old days of crypto
Forking off Bitcoin is by no means a new thing to do but the way it was done in the past was different. If there was a new idea how Bitcoin should be, then a new cryptocurrency was created. Probably the oldest and most well known example is the 2011 created Litecoin (LTC), which is doing pretty well since its inception. Though Litecoin is technically not a fork, it is a newly created currency which implemented its own ideas on how Bitcoin should be. The main difference to Bitcoin forks nowadays is that Litecoin didn’t use any previous history of the BTC blockchain to distribute coins but rather created a new and empty blockchain on which the distribution started again by PoW mining. So there weren’t any dividends for BTC holders back then.
Using the original blockchain for coin distribution is a marketing instrument
As this method is seemingly attracting new investors it will become more and more popular. Probably there will be more forks of BTC which are forking “the dividend way”. Bitcoin Gold (BTG) is a good example.
And there seem to be some other “Bitcoin [you name it]” in the line that hope to jump on the bandwagon and attract investors attention due to their distribution method. Note the time at which the forks happened.
Every new coin that forks off Bitcoin and uses the original blockchain for coin distribution will be talked about which is great marketing. Most developers of the new coins argue that the original BTC blockchain can be seen as a fair distribution of coins and a distribution using the old BTC history would counter centralisation.
Other cryptos also seem to try to increase their popularity by declaring “dividends”:
This is an ad seen on Coinmarketcap. NXT holders for example will get some other crypto.
Investors apparently like this. What do you think? Do you think using the history of an established blockchain is a good way to distribute and (kick)start a new cryptocurrency?