What is a “Genesis block”?

A genesis block is the very first block of a blockchain. It is usually mentioned as block 0 or block 1.

For a blockchain powered Project, like a Cryptocurrency, having its own genesis block means a few important things about its integrity and fair distribution of digital coin rewards.

First of all, it means that the specific project has been launched as an independent one with its own history and its own rules.

This way a Cryptocurrency with its own genesis block is not using a copy of another project’s blockchain , just changing some rules from a specific block and on.

On the other hand, the cryptocurrencies that don’t have their own genesis block , are just blockchain forks of other cryptocurrencies and they airdrop the coins to specified holders of other coins. For example the BitcoinPrivate is a fork of Bitcoin and ZClassic and the majority of the BitcoinPrivate coin supply has been “airdropped” to people who owned Bitcoins and ZCL coins during a specific time frame.

Of course the probability of speculation by teams that are launching forks is really high. Sometimes the forks are expressing the different view of a Community part or are offering some solutions by setting different rules after a specified block height. However in reality, the most times, are just the perfect ‘speculation medium’. It is quite simple : By using the blockchain of an already well-known cryptocurrencies the “developers” of a new project are getting the needed exposure. They just create a set of rules for giving to their new creation. These rules are known to them before going public and they can fulfill them much earlier. The most simple way is by acquiring the required coins (on whose blockchain the fork will be applied)   and selling them to the buyers who are pumping the prices after they publication of the rules.

Example : When the BTCP (Bitcoin Private) team announced that they would give BTCP coins to ZCL and Bitcoin holders, the ZCL price enjoyed an insane price pump. The makers of BTCP could easily have bought cheap ZCL before the publicity of the rules , and they could easily know that their BTCP should be sold in the very beginning of the Project. Easily, everyone can imagine the crazy profit that a closed team could enjoy in scenarios like the aforementioned one.

This is why having started from a Genesis Block is a really important parameter for a Cryptocurrency and most of all, for their supporters. If they don’t wish to be victims of extreme speculation scenarios.