I know what you’re thinking. Another fork? Now? Can it be?
The answer is yes. Bitcoin Diamond is the result of a collaboration between two Bitcoin mining teams, Team EVEY and Team 007, who joined to form the aptly named Bitcoin Diamond Foundation.
Like Bitcoin Cash, Bitcoin Diamond decided to tackle Bitcoin’s scalability issues by raising the block size to 8mb. According to Bitcoin Diamond’s website, “the speed of generating blocks will be increased five times and the ultimate goal is to improve transaction confirmation speed for the entire BTC blockchain”.
Bitcoin Diamond will utilize a new proof-of-work algorithm that is reportedly more efficient. Additionally, Bitcoin Diamond claims to be more anonymous than the original Bitcoin. Unlike Bitcoin, transactional amounts and BCD balances on the Bitcoin Diamond network are encrypted.
As with previous coins that formed as a result of Bitcoin forks, Bitcoin Diamond tokens will be distributed on a 10 BCD-to-1 BTC ratio to Bitcoin holders. The Bitcoin Diamond website (btcd[dot]io) claims that more than twenty exchanges will support the coin after its birth. The website also lists five wallets that will be compatible with BCD, including Ledger.
Big Talk, but Something’s a Little Strange…
There are a few things about this particular fork that seem a little less than legitimate. For one thing, none of the actual identities of any of the members of Bitcoin Diamond’s development or operational teams have been made public.
While this may not seem like an issue outright, a lack of names and faces is often an indication of shady operations in the world of cryptocurrency. Additionally, there is no whitepaper or any other technical information to back up any of the technological claims that BCD is making.
The cryptocoin may very well have been conceptualized without any malicious intent, but it’s not entirely impossible that the fork was created for the purposes of developing a currency that could easily be subjected to price manipulation.
Here’s how it could work: because everyone who holds Bitcoin will receive an equivalent amount of BCD after the fork, the coin’s value will be pumped artificially high in the immediate period following its release (as was the case with Bitcoin Cash and Bitcoin Gold.)
If BCD follows in the footsteps of Bitcoin Cash and Bitcoin Gold, the holders of the new coin will ‘dump’ them onto exchanges as soon as the opportunity arises. This will cause the value of BCD to drop rapidly.
Hopeful market manipulators will use the drop as an opportunity to secure large holdings of BCD that can later be used for ‘pump-and-dump’ schemes. Some in the crypto community have suspected that Bitcoin Cash has become centralized through a similar process, and has in turn been used for manipulative purposes.
A Lot of Forks, and a Few Concerns
If everything goes as planned, this will be the third successful Bitcoin fork in four months. (There would have been four, but the proposed SegWit2x fork was ultimately called off.) While the forks have been a positive thing for the price of Bitcoin in the short-term sense, fragmentation of the market has become a concern.
Some in the crypto community argue that a series of forks has the potential to weaken the Bitcoin ecosystem, and that the possibility of not knowing which coin is the ‘real’ Bitcoin could cause a crisis. Indeed, eyebrows were raised a few weekends ago when Bitcoin Cash was booming, and Bitcoin bigwigs were tweeting their praises of the coin as the new king.
However, the hype eventually died down, and Bitcoin – while shaken – remained stable. In fact, Bitcoin is thriving; the price has been hovering around $8200 for the past several days, and some analysts predict that the coin could reach over $10,000 by year’s end. Bitcoin’s market cap has risen above $136 billion, and is continuing to swell.
In any case, Bitcoin’s journey to mainstream acceptance and practical adoption will most likely continue down a road filled with many forks. While there may one day be a cryptocurrency that outpaces Bitcoin, that day will not come for a long time.