Fork Coin: An In-Depth Analysis of New Cryptocurrencies from Blockchain Forks

“Fork Coin” refers to a new cryptocurrency generated through a blockchain “hard fork”. In essence, it is an independent token formed by modifying the core protocol rules based on the code framework of an existing blockchain.

Blockchain forking is a special phenomenon in the maintenance of distributed ledgers: when nodes worldwide disagree on the operating rules of the blockchain (such as block size or consensus mechanism), some nodes choose to bookkeep under new rules, forming a new chain parallel to the original one. The token of the new chain is the fork coin, while the token of the original chain continues to operate independently.

Note: Only “hard forks” produce fork coins (e.g., BCH), while “soft forks” are compatible upgrades and do not give rise to new cryptocurrencies.

1. Community Consensus Divergence (The Primary Trigger)

When the cryptocurrency community (developers, miners, investors) has irreconcilable conflicts over the project’s development direction, forking often becomes a solution. Taking Bitcoin Cash (BCH) as an example, the Bitcoin community split over “block expansion” in 2017. The camp advocating for expansion launched a hard fork, giving birth to BCH to resolve transaction congestion on the original chain.

2. Technological Iteration and Functional Expansion

Some teams hope to add new features (such as smart contracts or private transactions) to the blockchain but face opposition from the original community to modifying the core protocol. Thus, they develop a new chain through forking and launch a fork coin with new capabilities.

3. Market Speculation (To Be Vigilant)

A small number of institutions leverage the popularity of the original cryptocurrency to attract traffic through “fork airdrops” and launch fork coins without practical applications, which is essentially speculative behavior.

Bitcoin Cash (BCH) is one of the most successful fork coins to date, born from Bitcoin’s “block size dispute”:

• Background: In 2017, Bitcoin’s block size was only 1MB, leading to transaction congestion and soaring fees. The community split into “expansionists” and “chain preservers”;
• Fork: On August 1, 2017, the “expansionist” camp launched a hard fork, increasing the block size to 8MB and giving birth to BCH;
• Current Status: BCH resolved Bitcoin’s transaction efficiency issues, has long ranked among the top cryptocurrencies by market capitalization globally, and become a benchmark case for fork coins.

1. Impact on the Market and Users

For investors: High-quality fork coins may bring short-term returns (e.g., BCH’s price surge shortly after launch), but most fork coins lack value support and carry extreme risks;

For users: Forking is often accompanied by “candy airdrops” (users holding the original coin can receive the fork coin), but attention must be paid to the compatibility of new chain wallets to avoid asset losses;

For the industry: It is both an attempt at technological exploration and a potential catalyst for market chaos and regulatory pressure.

2. Three Core Risks to Watch For

Regulatory Risk: Cryptocurrency regulation is tightening globally, and fork coins may be investigated for “illegal financial activities”;

Technical Risk: New chains have fewer nodes and weaker security, making them vulnerable to hacker attacks or technical vulnerabilities;

Market Risk: Most fork coins lack practical application scenarios, their prices are manipulated by capital, and the probability of a sharp decline is extremely high.