New cryptocurrencies are being distributed to people that own Bitcoin and Ethereum: What does it mean and will the trend continue?
Everyone has heard of ICOs, but an older approach involving airdrops and hard forks is gaining new traction and holders of Bitcoin and Ethereum stand to benefit significantly if the trend continues.
In an ICO, participants contribute capital to buy tokens whereas, in an airdrop (or hard fork), tokens are allocated to existing holders of a particular chain—typically Bitcoin or Ethereum. That’s right, instead of buying tokens, they’re simply given away to the holders of another coin.
If the trend continues, Bitcoin and Ethereum are poised to spin-off dozens or hundreds of crypto-offspring. If so, this phenomenon could have significant implications for Bitcoin and Ether (the native asset of Ethereum) holders—and increase urgency for prospective holders. (Disclosure: My firm, Blockchain Capital, invests in blockchain startups and crypto assets including Bitcoin and Ether.)