Open-source technology which Bitcoin is part of is great for collaboration and trying out variations of ideas to find the best solution. Since anyone can have access to the code base and creates a duplicate version of Bitcoin means some have had their own view of how Bitcoin can be improved and this has lead to forks of the original code and blockchain
The pull of the Bitcoin brand and its ability to be used interchangeably between all cryptocurrencies as well as its large market share as lead to many news investors becoming confused by the various forks available.
The psychological need to want to own a whole of something has also driven the popularity of Bitcoin forks as owning a whole Bitcoin Cash or Bitcoin Gold can seem more attractive than a fraction of Bitcoin.
Image source: - bitwala.com
What is a Bitcoin fork?
A Bitcoin fork happens when two schools of thought for improvements for the network clash and the community decides to split off and persue a new idea while other remains with the original course of action.
Forks are typically conducted in order to add new features to a blockchain or to reverse the effects of hacking or catastrophic bugs like with the split between Ethereum and Ethereum Classic.
Forks require consensus to be resolved or else a permanent split emerges and two coins with separate chains will go forward. Since Bitcoin is the first and most popular coin and chain, it has been forked numerous times into various projects.
The history of Bitcoin forks
Going into the various forms of forks and reasons why can be a bit complicated so I will only deal with Hard Forks of Bitcoin in this post of which there have been three that have had considerable uptake.
The following is a list of hard forks splitting bitcoin by date and/or block:
- Bitcoin Cash: Forked at block 478558, 1 August 2017, for each bitcoin (BTC), an owner got 1 Bitcoin Cash (BCH)
- Bitcoin Gold: Forked at block 491407, 24 October 2017, for each BTC, an owner got 1 Bitcoin Gold (BTG)
- Bitcoin SV: Forked at block 556766, 15 November 2018, for each Bitcoin Cash (BCH), an owner got 1 Bitcoin SV (BSV).
The first big fork in the Bitcoin network came in the form of Bitcoin Cash which was due to the rising fees in Bitcoin Transactions. The community was split on how to resolve this and some decided to hard fork to increase the blocksize.
The adoption of bigger block sizes was seen as a way to turn Bitcoin into a more suable currency than a simple store of value and this a new coin was born.
Bitcoin Gold (BTG) was a Hard Fork that Implements New Mining Algorithm in July 2018. The actual algorithm that was developed by Zcash and modified the algorithm into something called Equihash-BTG. The new algorithm requires more memory than the one that was originally developed by Zcash.
The stated purpose of the hard fork is to change how Bitcoin was mined so that application-specific integrated circuits (ASIC) miners could not mine and centralise the Bitcoin Gold blockchain.
Bitcoin Satoshis Vision
Bitcoin SV isn't only a fork of Bitcoin but a fork of a fork. Bitcoin Cash was split on 15 November 2018. A hard fork chain split of Bitcoin Cash occurred between two rival factions called Bitcoin Cash ABC and Bitcoin Cash SV.
Bitcoin ABC (short for Adjustable Blocksize Cap) which would maintain the block size at 32MB.
While Bitcoin SV, short for "Bitcoin Satoshi's Vision," that would increase the block size limit to 128MB.
For a larger history of Bitcoin forks check out the diagram below.
Image source: - visualcapitalist.com
Sticking a fork in it
Despite these projects having the name Bitcoin in the title, they are not Bitcoin or associated with Bitcoin in any way and are completely different projects. They have their own wallets and blockchain and need to be traded and treated like any other altcoin.
Have you bought any of the Bitcoin forks? Which one do you own? Why do you believe in Bitcoin forks? Do you believe they improve or only disrupt the ecosystem?
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Authored by @chekohler