Over the past year, the Bitcoin blockchain has experienced a handful of forks, which occur when a majority of miners join together to update the underlying protocol. Often, these updates improve the type or quality of financial services available through the network. Sometimes, however, Bitcoin forks create little to no value for virtual currency holders.
Bitcoin Interest is an upcoming hard fork on the Bitcoin blockchain that updates consensus rules to allow users to earn interest on Bitcoin Interest Coins (“BCI”) they hold. Because everyone who holds Bitcoin at the time of the fork will receive an equivalent amount of BCI, this fork has the potential to bring substantial value to cryptocurrency investors.
Successful Hard Forks
Some of forks have been wildly successful. The first hard fork, Bitcoin Cash, now has a market value of over $50 billion, threatening the market dominance of Bitcoin and Ether. Bitcoin Gold, which followed Bitcoin Cash, also reached the top ten in popular virtual currencies, with a total market cap of about $6.6 billion.
Bitcoin Cash and Bitcoin Gold’s runaway success has inspired several talented tech entrepreneurs to follow suit. Programmers with the skill and ability to create a coin with better mining, transaction verification, or security than Bitcoin are all taking their shot at creating the next big success story in Bitcoin forks. However, as forks become more and more common, investors may struggle to separate the winners from the losers.
Bitcoin Interest Stands Out Among the Upcoming Bitcoin Forks
The forks that followed Bitcoin Cash and Bitcoin Gold have not been able to mimic these coins’ runaway success. For example, Bitcoin Diamond – the third Bitcoin hard fork – was launched in late November but has not yet even broken into the top 1000 in the increasingly competitive crypto market. This is likely due to the fact that this fork simply cannot stand out among the crowd of new coins launched through ICOs.
Unlike other Bitcoin forks, which more-or-less just launch new coins, Bitcoin Interest will provide a new financial service to the virtual currency market place. Specifically, the interest-bearing bank account.
Interest-Bearing Virtual Currency Wallets Through Bitcoin Interest
Bitcoin Interest updates the Bitcoin consensus protocol to provide interest payments to users holding the currency for specific periods of time. For the first time, virtual currency holders will be able to get the same risk-mitigation benefits as putting money into a traditional bank account.
Banks give interest on accounts to entice people into depositing funds into the bank. The bank turns around and loans this money to individuals and businesses, and then collects profit from the interest charged on these loans. Even though savings deposits are critical to the bank’s profitability, interest rates for savings accounts are usually pretty low. The best savings accounts only offer around 1% on money deposited at the bank. However, Bitcoin Interest uses the power of blockchain technology to offer a much greater potential return on held funds.
Bitcoin Interest: Providing Returns on Parked Coins
Traditional banks offer interest-bearing accounts, but so far this everyday financial benefit has not been available to virtual currency users. With Bitcoin Interest, cryptocurrency holders can earn interest on coins they keep in their wallets. This interest will be paid weekly or monthly in the form of Bitcoin Interest Coins (“BCI”).
Unlike traditional savings accounts, which pay low, fixed interest over time, Bitcoin Interest wallets earn interest depending on the principle in your account as well as how many coins are parked in the active interest round among all users. So, you earn greater returns the longer you park your BCI coins and the overall market savings rate.
Several hard forks are on the horizon. However, Bitcoin Interest may be one of the most successful forks on the Bitcoin blockchain yet. Bitcoin Interest integrates a familiar banking service and delivers it to the virtual currency community. Anyone interested in taking advantage of the benefits provided by this hard fork must have Bitcoins in an exchange such as HitBTC or wallet that will support the one-to-one swap of Bitcoin Interest (“BCI”) coins before January. This is definitely a fork that you will not want to miss!
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