The most famous Bitcoin forks
In this article, we will talk about the most popular Bitcoin hard forks and explain how the developers tried to improve the main cryptocurrency code.
Complete Bitcoin fork guide: learn everything you need to know about past and upcoming Bitcoin forks in this complete Bitcoin fork guide.
In early 2009, a mysterious developer (or team of developers) working under the pseudonym Satoshi Nakamoto released the first program that implemented Bitcoin in digital currency. Since then, Bitcoin has not only gained wide popularity around the world but has also inspired hundreds of other developers to create their own digital currencies.
Many of these cryptocurrencies use aspects that were already inherent in Bitcoin and Satoshi’s concept. Others take the Bitcoin model and adapt or try to improve it. In some cases, Bitcoin has brought forth coins known as forks that are based on the same basic concept and software but differ from the original.
What is fork?
Fork is the process of division of the cryptocurrency blockchain into two branches. In essence, it is a change in the source code of a cryptocurrency. Given that the program code is open, anyone with sufficient knowledge can take it and “refine it” by creating new cryptocurrencies.
There are two types of forks: hardforks and softforks. Hardfork is a division that is not compatible with old software; softfork is compatible. For example, if the bitcoin block size is 1 MB, then to increase its size to 2 MB, you need to make a hardfork, and to reduce it to 500 KB, a softfork is enough. New cryptocurrency could be created only with hardfork.
How many Bitcoin forks are there?
There are more than a hundred different forks, most of them are relatively unknown or dead. There can be an unlimited number of forks, the most famous of them are listed below. The list also includes key hardforks that changed the history of Bitcoin.
Bitcoin XT
The Bitcoin XT was one of Bitcoin’s first known hardforks. The software was launched by Mike Hearn in late 2014 to incorporate some of the new features he had proposed. While the previous version of Bitcoin allowed up to seven transactions per second, Bitcoin XT was designed for 24 transactions per second. To do this, it was suggested that the block size should be increased from 1 megabyte to 8 megabytes.
Bitcoin XT was initially successful and its software was launched on more than 1,000 nodes in late summer 2015. However, just a few months later, the project lost user interest and was actually left at a dead level. Bitcoin XT is still technically available, but in fact, it has lost popularity.
Bitcoin Classic
When Bitcoin XT was dying, some members of the community still wanted to upgrade and increase the block size. In response, an independent development team launched Bitcoin Classic in early 2016.
Unlike XT, which proposed increasing the block size to 8 megabytes, Classic intended to increase it to only 2 megabytes. Like the Bitcoin XT, initial interest in the Bitcoin Classic attracted around 2000 nodes over several months during 2016. The project also exists today, with some developers actively supporting Bitcoin Classic. However, cryptocommunity seems to have moved on to other options overall.
Bitcoin Unlimited
Bitcoin Unlimited remains a kind of mystery even a year after its release. The developers of the project released the code but did not specify what type of fork it will need. In theory, Bitcoin Unlimited allows miners to choose the size of their blocks, and nodes and miners limit the size of the received blocks to 16 megabytes. Despite some continuing interest, Bitcoin Unlimited is largely unrecognized.
SegWit
Bitcoin core developer Peter Wuille introduced the idea of Segregated Witness (SegWit) at the end of 2015. Simply put, SegWit aims to reduce the size of each Bitcoin transaction, thereby allowing more transactions to be executed at the same time. SegWit was technically a softfork. However, it has most likely influenced the creation of future hardforks.
Bitcoin Cash
In 2017, a group of influential Bitcoin developers decided to make Bitcoin hardfork, which led to the creation of a completely new cryptocurrency and a separate blockchain, Bitcoin Cash. The main reason for this was that commissions for transactions on the Bitcoin network were becoming too expensive. In fact, transactions in 2009 were worth less than a cent, but soon the transaction price rose to several dollars.
However, before Bitcoin’s fork was released, the development team tried to persuade the Bitcoin community to make the necessary changes to the original Bitcoin client. The changes the Bitcoin team wanted to make were to increase the maximum block size from 1 MB to 8 MB. This would allow the miners to add more transactions to the block, which would reduce the commission that Bitcoin users pay for transferring funds.
Unfortunately, most users did not want to make changes, so the developers had to create a brand new blockbuster. The Bitcoin Cash blockchain was officially launched on August 1, 2017. Like Bitcoin, Bitcoin Cash has a limit of 21 million coins, and each block is mined every 10 minutes before it is confirmed.
On the other hand, since the maximum block size has been increased eight times, this has allowed Bitcoin Cash to scale more transactions. Scalability (or scaling) is the maximum number of transactions that a particular blockchain can handle every second.
Bitcoin is very limited in this sense, as it can handle an average of only 7 transactions per second. One of the reasons why Bitcoin is not yet a payment system is that it needs to solve the scalability problem. Thanks to the changes introduced after this Bitcoin split, Bitcoin Cash can process about 61 transactions per second.
Interestingly, anyone who held a BTC on a split day received exactly the same amount of Bitcoin Cash (BCH). This means that if you held 0.5 BTC, you also received 0.5 BCH upon the Bitcoin Cash launch day. The main influencer of the Bitcoin Cash project is Roger Ver, a well-known investor in the crypto industry. Ver, often referred to as Bitcoin Jesus, believes that Bitcoin Cash is actually “The Real Bitcoin,” and he believes that it will make Bitcoin disappear.
Bitcoin Gold
The Bitcoin Gold blockchain was officially launched in October 2017. Although Bitcoin Cash tried to address the issue of high transaction costs, the people behind Bitcoin Gold wanted to make Bitcoin more “decentralized”.
Bitcoin is still technically decentralized, the system is not controlled by any single body, nor is it supported by either the central bank or the government, but there are still some concerns about the transactions verification process. This is because the vast majority of Bitcoin miners are controlled by only a few pools in China. A mining pool is a place where people combine their hardware power to increase their chances of getting a mining reward.
Once the reward is received, it is distributed among the participants in the pool depending on how much computing power each person has invested. Ultimately, this gives the people managing the mining pool a lot of power and influence over the network, so some people think that mining has become too centralized.
In the early days, before the mining pools became widespread, it was possible to mine BTC using the CPU and GPU of your computer, which meant that everyone could do it without leaving their own homes. These days are long gone, if you want to win the reward — you not only need to be a member of the pool but also have really expensive ASIC mining hardware.
Who makes a lot of mining equipment? One of the largest mining pools in the industry!
In response, Bitcoin Gold has made a new mining process that ensures that ASIC equipment cannot be used, which means that everyone has an equal chance to participate in the crypto market. Like Bitcoin and Bitcoin Cash, Bitcoin Gold has a maximum of 21 million BTGs in total. In addition, the maximum block size of 1 MB has not been increased either. However, instead of spending 10 minutes on a block like Bitcoin, Bitcoin Gold can confirm a transaction in just 2.5 minutes, which makes it four times faster.
Another important difference is the way the miners verify transactions. Interestingly, Bitcoin Gold also uses the Proof-of-Work algorithm (just like Bitcoin), but it has been modified to only allow miners using the GPU, not the ASIC. As with Bitcoin Cash, everyone who had Bitcoin at the time of launch received identical amounts in Bitcoin Gold.
Bitcoin Gold has also performed very well since it was launched. The BTG coin reached a record high in December 2017, reaching a market capitalization of just under $8 billion.
However, in May 2018, Bitcoin Gold underwent a “51% attack”. This is when someone (or a group of people working together) can get 51% or more of the total hashrate of the network, which means that it is possible to make changes to the network. As a result, just over $18 million BTG were stolen and converted on a third-party exchange.
This attack is actually quite ironic because the whole point of Bitcoin Gold was to prevent centralized miners from gaining too much control. As a result of the attack, the developers plan to fork the code of Bitcoin Gold to prevent this situation from happening again in the future.
Bitcoin Private
Bitcoin Private was officially launched in March 2018, but in fact, it was not a fork of the original Bitcoin. Everything is a little bit complicated: Bitcoin Private is a fork of the ZClassic, ZClassic is a fork of ZCash and Zcash is a fork of Bitcoin.
Its founder and main developer Rhett Creighton also created ZClassic, and since then other followers have joined the team. Creighton’s idea was to combine the privacy and secrecy of ZClassic with the security and popularity of Bitcoin.
As with the other Bitcoin forks, everyone who had a BTC at the time of launch received 1 to 1 Bitcoin Private (BTCP) coin. In addition, anyone who has a ZClassic (ZCL) also received 1 to 1. In total, the maximum number of BTCP coins is 21 million. The block size is twice of Bitcoin (2 MB), and BTCP can also confirm transactions four times faster.
In addition, just like Bitcoin Gold, the mining mechanism has been changed to prevent people from using the ASIC equipment, which means that mining is much more decentralized than Bitcoin. It also uses the Proof-of-Work consensus mechanism.
Like ZClassic, Bitcoin Private uses what is called “ZK-Snarks”. Although every movement of funds is still visible in the blockchain, the sender and the recipient remain anonymous. This is a bit different from the original Bitcoin because although the identities of the address owners are not disclosed, it is possible to find out how much a certain Bitcoin address has. But you can also go back in time to track which addresses and how each user has been in contact with them.
Bitcoin Diamond
Bitcoin Diamond was directly forked from the original Bitcoin. The main goal of its development team was to allow users to remain even more anonymous. In this sense, its goal is very similar to Bitcoin Private.
When Bitcoin Diamond was first launched in November 2017, the coins were distributed quite differently from what we mentioned earlier. While the other forks kept 21 million coins restriction, Bitcoin Diamond increased this number 10 times. As a result, if you had held 0.5 BTC at the time of the Bitcoin fork, you would have received 5 Bitcoin Diamond (BCD) coins.
As with Bitcoin Cash, the maximum block size has been increased from 1 MB to 8 MB, the transaction confirmation time is 10 minutes. Some people in the crypto community believe that the Bitcoin Diamond is a fraud, and many are dissatisfied that the team has not even released an official technical document.
Conclusion
Other cryptocurrencies also have their own forks. For example, Ethereum, the second most famous cryptocurrency, is also created as a result of hardfork. There was the original Ethereum blockchain, but hardfork occurred after the hacker stole many ETH coins in The Dao’s smart contract.
Then a significant number of Ethereum users decided to roll back problematic transactions so that the hacker couldn’t use the stolen funds and create a fork.
Opponents of this decision remained in the minority, but continued to support the old chain, which was called Ethereum Classic, and “ETH”, which now ranks second in capitalization, remained Ethereum.
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