How is economy affected after forks? Where did "free money" come from?

VitKoyn

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Quote from: DziugasB on February 22, 2018, 10:29:39 PM

Whenever there is a fork, for example, Bitcoin fork that gives 1/100 new coins of what you previously had in your wallet, where did this money come from?
I always wondered how it affects the economy because it seems that this money is printed out of thin air if there was no capital to back everyone's free coins up.
In other words, lets say I have 1000 Bitcoin. And Bitcoin Fork Coin (BFC) decides to give everyone 1/100 of every Bitcoin they have. So now I get 10 BFC coins for free. Where did this money come from? Isn't that the same as printing money? Or is that BFC coin creator's money?
If any part sounds confusing, I will try to explain the question in a different way.

The value of those Bitcoin hard fork coins depends on how much support it will get, anyone that have few understanding about this can fork Bitcoin and take a snapshot because it is open source and make a lot of money out of nowhere, this is why there are lots of hard forks that is coming out because people found it easier to make money than having an ICO. But the problem here is lets say that you got a lot of free fork coins, of course it is great to have free money but you have to know first which exchanges will support it, if no one wants to support it or buy it then it is useless even its price worth a hundred of dollars per coin. People should stop supporting those useless fork coins, yes we will get a free money but we are not the ones who will become rich with this, it is those who are behind it.

Carlsen

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When a fork occures there basically is no new money.
The money turns up at the point where you find somebody who is willing to buy your shares that emerged during the fork.
You get the money directly form the buyer, it is just like selling a car you have won in a lottery.
And in case nobody thinks that the fork was a good idea, you will find no buyers, so there is no new money.

digaran

copper member

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🖤😏

Quote from: fiulpro on February 23, 2018, 01:45:20 AM

this newer version has 0% value

This newer version had more than $500 Million support before the fork.

Quote from: fiulpro on February 23, 2018, 01:45:20 AM

Forks will come as long as people believe in the particular market

Nobody believes in a clone, they believe in money.

Quote from: fiulpro on February 23, 2018, 01:45:20 AM

Forks expand the market and creates newer monetary values out of nothing

Out of nothing? they sold more than 300,000 Bitcoins. if my activity tokens find a value, that would be out of nothing.

Quote from: oddwh on February 23, 2018, 12:33:04 AM

Yeah I've been surprised by the bitcoincash fork. In my opinion, I was convinced that once the fork would happen, the BTC would crash proportionnaly to the bitcoin cash value. This didn't happened so it's like people have welcomed bitcoin cash as a new independant currency.

In fact I was thinking this would have the same results than airdrops for the BTC price, creating inflation.

Do you think that my activity token (total scam) airdrop caused any inflation for Bitcoin price?

fiulpro

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Its not simply creating new money. You should understand what a fork is in the first place. In most simple way, it is simply making two way out of one, for whatever reason.

Now in case of bitcoins, the fork brought about a new and similar currency called bitcoin cash. This didnot gabe you equal amount of bitcoing, but provided you with a newer crypto called bitcoin cash.

Now what happenes in a fork is that suppose a new thing is created, then this newer version has 0% value as compared to the older one which in this case is bitcoin.
So basically, the bitcoin cash got created but without any value, so in actual sense no new money was created from thin air.

Now this new thing/currency, with the changing market starts gaining value and hence now is when the actual money is being built or manufactured in a sense. Forks will come as long as people believe in the particular market, in this case bitcoin. Forks expand the market and creates newer monetary values out of nothing but the trust and popularity the former entity (bitcoin) holds.

DziugasB

newbie

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Quote from: jseverson on February 23, 2018, 01:03:19 AM

They're not much different from Bitcoin in that their value is dictated by what the people want to buy them for. If, say, your BFC coins are worth $10 each, you didn't really receive $100 for free; you're going to have to find someone who wants to take them out of your hands first. That means you can fork as much as you want, but if no one recognizes your fork as a legit project, then it's worthless. It does kind of sound like creating money out of thin air, in a sense, but it's still all just a product of speculation.

As for its effect on the economy, it affects the crypto market's market cap, at the very least. Their value is added to the overall market cap, even if no one technically spent (or received) any money on them. It's one of the reasons why market cap isn't a good metric of how much money is flowing within the crypto space.

Yeah that totally makes sense that the coins that supposedly are worth $100 are not worth anything unless someone wants to give me that $100. Now speculation seems as a HUGE factor in cryptocurrency trading, its influence is bigger than I thought. You just blew my mind to a whole new level. Thank you

jseverson

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They're not much different from Bitcoin in that their value is dictated by what the people want to buy them for. If, say, your BFC coins are worth $10 each, you didn't really receive $100 for free; you're going to have to find someone who wants to take them out of your hands first. That means you can fork as much as you want, but if no one recognizes your fork as a legit project, then it's worthless. It does kind of sound like creating money out of thin air, in a sense, but it's still all just a product of speculation.

As for its effect on the economy, it affects the crypto market's market cap, at the very least. Their value is added to the overall market cap, even if no one technically spent (or received) any money on them. It's one of the reasons why market cap isn't a good metric of how much money is flowing within the crypto space.

oddwh

hero member

Activity: 854

Merit: 1002

Yeah I've been surprised by the bitcoincash fork. In my opinion, I was convinced that once the fork would happen, the BTC would crash proportionnaly to the bitcoin cash value. This didn't happened so it's like people have welcomed bitcoin cash as a new independant currency.

In fact I was thinking this would have the same results than airdrops for the BTC price, creating inflation.

Beefcake

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Beefcake!!!

Anyone can make a fork. I can make one tomorrow if I want.

The money comes only if there is some strong support behind the fork.

To my knowledge bitcoin cash is the only really successful bitcoin fork, and it had (and still does) a strong following. Lots of people thought it was a good fork, and voted with their money. That is where it comes from. Some one, or rather many people have to support the fork with actual money otherwise it is worthless.

DziugasB

newbie

Activity: 85

Merit: 0

Whenever there is a fork, for example, Bitcoin fork that gives 1/100 new coins of what you previously had in your wallet, where did this money come from?

I always wondered how it affects the economy because it seems that this money is printed out of thin air if there was no capital to back everyone's free coins up.

In other words, lets say I have 1000 Bitcoin. And Bitcoin Fork Coin (BFC) decides to give everyone 1/100 of every Bitcoin they have. So now I get 10 BFC coins for free. Where did this money come from? Isn't that the same as printing money? Or is that BFC coin creator's money?

If any part sounds confusing, I will try to explain the question in a different way.

Topic: How is economy affected after forks? Where did "free money" come from? (Read 175 times)