The Evolution of Bitcoin Through Noteworthy Forks
Through the process of forking, numerous digital currencies have emerged. Mapping the diverse forks onto a timeline and distinguishing between these cryptocurrencies can prove challenging for the average cryptocurrency investor. Many prominent forks of the Bitcoin blockchain will be examined.
A hard fork, in contrast to a soft fork, necessitates that all network members upgrade to the new protocol, rejecting the previous rules. Transactions created under the old rules are still accepted by a soft fork. A soft fork is a protocol modification that doesn’t lead to the rejection of the existing rule framework.
A Bitcoin hard fork signifies a transformation in the protocol layer of the Bitcoin blockchain that leads to the creation of a new blockchain. Such hard forks are executed to forge a blockchain and cryptocurrency when divergent views arise regarding the direction a blockchain should pursue. Developers typically allocate a quantity of the new cryptocurrency they consider equivalent to the original when a new cryptocurrency results from a hard fork. Numerous Bitcoin hard forks have emerged over the years in efforts to mimic or enhance the original. From 2015 through 2023, there have been several prominent Bitcoin hard forks.
A blockchain generally consists of five layers: the protocol layer, the consensus layer, the network layer, the application layer, and the data layer. The protocol layer contains the programming necessary for the blockchain’s functionality. Being software, it requires updates to resolve issues or implement changes desired by community members and/or developers. Sometimes these changes receive universal support, while at other times, they don’t.
When modifications to the protocol layer result in an incompatible blockchain, the term hard fork is used. Hard forks essentially lead to the development of a new blockchain and cryptocurrency, yet not all recent editions constitute a departure from the original. They might represent modifications to the main blockchain requiring a fork.
Despite this, developers, participants, blockchains, and users that separate from the original blockchain and network are often described using the term hard fork.
Bitcoin XT (2014)
One of the earliest prominent Bitcoin hard forks was Bitcoin XT, introduced by Mike Hearn in late 2014 with several proposed enhancements. The previous Bitcoin version supported up to seven transactions per second, while Bitcoin XT aimed to achieve 24 transactions per second. This objective involved increasing the block size from one megabyte to eight megabytes.
Initially, Bitcoin XT experienced some success with updates and nodes functioning until late 2018, when it was effectively abandoned. Maintenance for Bitcoin XT has ceased.
Fast Fact
The onset of Application Specific Integrated Circuit (ASIC) hardware, specifically designed for Bitcoin mining, made it nearly impossible to profitably mine at home using an individual computer’s processing speed, despite initial feasibility with personal laptops and desktops.
Bitcoin Unlimited (2015)
Bitcoin Unlimited has been a bit of a mystery since its inception in late 2015. The developers released code without specifying the type of fork required. This hard fork distinguished itself by allowing miners to set their block sizes, accepting up to 16 megabytes. Despite enduring interest, Bitcoin Unlimited has generally failed to gain widespread adoption.
Bitcoin Classic (2016)
Bitcoin Classic emerged in early 2016 as a response to the ongoing debate over Bitcoin block sizes. Unlike Bitcoin XT, which proposed an eight-megabyte increase, Bitcoin Classic sought to increase it to just two megabytes. Though it initially garnered interest similar to Bitcoin XT and received strong support from certain developers, the community has largely shifted focus, and its maintenance has ceased.
Bitcoin Cash (2017)
To circumvent the segregated witness implementation’s protocol updates, some Bitcoin developers and users initiated a hard fork resulting in Bitcoin Cash. This fork split from the main blockchain in August 2017, allowing for block sizes of 32 megabytes to expedite network transaction processing times. Bitcoin Cash remains the most successful hard fork of the primary cryptocurrency, ranking as the 13th largest digital currency due to concerns about overly specialized mining equipment.
One of the distinctive features of the Bitcoin Gold hard fork was the execution of a “post-mine,” a process where 100,000 coins were mined after the fork. A portion of these coins was allocated to a special “endowment,” and developers have indicated that this endowment will be used to develop and finance the Bitcoin Gold ecosystem, with a portion reserved as compensation for developers.
Bitcoin Gold largely adheres to many core Bitcoin principles but diverges concerning the hardware requirements.
Bitcoin SV (2018)
Wright’s claims to have invented Bitcoin have been debunked, but the project attracted support from some developers and enthusiasts. Although a hard fork of Bitcoin Cash in November 2018, Bitcoin SV possesses only a fraction of the user base and transaction volume compared to Bitcoin or Bitcoin Cash.
What Is a Bitcoin Fork for Dummies?
Imagine a fork in a cryptocurrency’s blockchain as an introduction to a new set of rules for Bitcoin. After the fork, the blockchain splits into two possible paths. Users mining this specific blockchain choose which rule set to follow. This decision mirrors a fork in the road.
What Was the First Bitcoin Fork?
The initial prominent Bitcoin fork, Bitcoin XT, was launched in 2014 by Mike Hearn. Aiming for 24 transactions per second, it proposed an increase in block size from one megabyte to eight megabytes, surpassing the previous limit of seven transactions per second.
When Did Bitcoin Fork?
Bitcoin’s first significant fork occurred in late 2014. Forks are generally conducted to add new features to a blockchain. Since its 2009 introduction, Bitcoin has undergone multiple forks, each creating new currency versions.
Is a Hard Fork Good or Bad?
A hard fork’s impact on a blockchain and its cryptocurrency can vary, sometimes significantly and sometimes minimally. It depends on the context surrounding the fork and the sentiment of both the community and developers.
Since its 2009 debut, Bitcoin has spawned numerous forks. Some have sought to imitate or improve upon Bitcoin in unique ways or avoid specific changes. While predictions remain uncertain, ongoing soft and hard forks in the cryptocurrency are likely.
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