Bitcoin forks are a widely-discussed phenomenon within the cryptocurrency market that can notably impact all stakeholders. These forks basically change how the network operates, how oneness is achieved, and even which virtual currency is used. A Bitcoin fork is a snap in the Bitcoin network whereby two separate ‘branches’ are created, each with its own protocol. One branch will continue to keep to the pre-fork protocol, while the other will keep to a new protocol with various rules.
The cryptocurrency and blockchain technology industry is very recent and buzzing. One of these terms is fork. Simply put, when someone makes a copy of the blockchain code and makes changes to it, these changes are made for a variety of reasons. Among these, the biggest reason is the hacking of any previous blockchain or the need for improvement of the new blockchain, etc.
What is Fork?
In the context of open source software, a fork is an exchange of source code. Since open source software is operated by many decentralized parties, when developers add a change to the code not all users are immediately affected by the changes. Certain users cannot upgrade to the new design.
Types of Bitcoin Forks
There are currently two main types of Bitcoin forks, a soft Fork and a hard fork.
- Soft Fork
A soft fork is a method in which the Bitcoin blockchain is improved or adapted without creating a whole new blockchain. The key feature of soft forks is that they are backward suitable. No new virtual currency is created, so users are not required to choose between using the old or new blockchain.
What is it? In contrast, a soft fork is any change that favors the rear. A soft fork is a reverse-compatible improve of the blockchain protocol. The better allows nodes running above versions to interact with other nodes, although with some useful limitations. When a soft fork is supported by only a opposition of hash power in the network, it could become the smallest chain and get orphaned by the network. Or, it can act like a solid fork, and one fetter can splinter off. When a soft fork is supported by only an opposition of hash power in the network, it could become the smallest chain and get orphaned by the network. Or, it can act like a solid fork, and one fetter can splinter off.
- Hard Fork
A hard fork is notably different to a soft fork since a whole new blockchain and virtual currency are created. The new blockchain is not backward-capable with the old blockchain, although it will reflect it in various ways. Due to this, network users must conclude whether to stick with the old blockchain or change to the new one.
A hard fork as it connects to blockchain technology, is a complete change to a network’s concord that makes previously infirm blocks and transactions valid, or vice-versa. A hard fork needs all nodes or users to upgrade to the current version of the protocol software.
Discussions of Bitcoin forks are normally focused on hard forks even these fundamentally change how network users need operate. Since a whole new blockchain is created, many characteristics will be modified, such as mining trial, block intensity, and transaction amount.
Hard forks break practically between nodes who adopted the changes and those who did not. In the inferior case scenario, a hard fork results in two different networks. Alternatively, hard forks have overwhelming consent from network members, and almost every node acquire the changes, resulting in a combined network.
Hard forks are sometimes needed to fix critical bugs or initiate entire changes to a protocol. However, because of the capability of a network split, hard forks are more dangerous than soft forks and are abstainer form by the Bitcoin circle as much as possible.
The most popular Bitcoin Forks
Let’s take a look at some of the Bitcoin forks:
The Bitcoin Cash Fork
In 2017, one of the influential Bitcoin developers was thinking about how to improve it, so they decided to create a hard fork. Bitcoin A is well known and its blockchain technology is improved and the creation of a completely new blockchain is called a Bitcoin fork.
The main reason behind this Bitcoin split was because Bitcoin transaction fees were becoming too overpriced. In fact, in what started as smaller than a cent in 2009, it quickly developed to a few dollars per transaction. However, when it comes to Bitcoin forks before the hard fork takes place, developers try to switch between Bitcoin’s core clients.
The changes that a team of developers desired to make was to rise the maximum block size from 1MB to 8MB. This would permit miners to add more transactions into a block, which would have decreased the fees that Bitcoin users pay to move funds. Bitcoin Cash was officially launched on 2017. It works like Bitcoin, except that Bitcoin Cash’s supply is limited to 21 million
Scalability (or scaling) is the highest amount of transactions that a specific blockchain can make every second. Increasing the size of the blockchain by 8 times also increases its efficiency. This makes transactions very quick.
It permit the Bitcoin Cash blockchain (or Bitcoin fork) to scale extra transactions. Scalability (or scaling) is the highest amount of transactions that a separate blockchain can process every second. Bitcoin is very limited in this sense because Bitcoin can only make 7 transactions per second. Bitcoin Cash can transact 61 per second after the Bitcoin split. Bitcoin Cash preserve its place as the most successful hard fork of the main cryptocurrency. Bitcoin Cash allows blocks of eight megabytes and does not acquire the SegWit protocol.
Bitcoin Gold is a Bitcoin fork blockchain that was officially launched in October 2017. Bitcoin Cash was created to lower Bitcoin’s transaction fees, but Bitcoin Gold is meant to make Bitcoin more decentralized.
Shortly after the introduction of Bitcoin Cash in 2017, Bitcoin Gold come after as a hard fork for mining apparatus and protocols. The creators of this fork aimed to make mining smaller specialized. Before the introduction of the project, mining had become hard and could no longer be easily done on private desktop computers and laptops. Special tools and hardware such as Application particular Integrated Circuit were before in use for mining bitcoin.
This is because the huge majority of Bitcoin mining is managed by just a some pools in China. A mining pool is where lots of people “pool” their hardware together to give them a better chance of conquering the mining prize. Once the Bitcoin prize is won, each person invests bitcoin and it is divided among the pools. Just like both Bitcoin and its Bitcoin fork BTC Cash, Bitcoin Gold will limit its BTG coin supply to a highest of 21 million. Furthermore, the maximum block size of 1MB wasn’t expand more. However, rather of taking 10 minutes like Bitcoin, Bitcoin Gold can affirm a transaction in just 2.5 minutes, making it four times rapidly!
However, in May 2018 Bitcoin Gold experienced the much dread “51% attack”. This is when someone or a group of people working together are allowed to gain 51% or more of the entire blockchain hashing power, meaning that they are in the interim able to make changes to the network. This processed in just over $18 million of Bitcoin fork BTG coins being purloin and changed at a third party barter. This attack is literally quite ironic because the entire point of Bitcoin Gold was to avert centralized miners from gaining too much authority. As a result, it is believed that the developers are planning to perform a fork of the Bitcoin Gold code, to secure that it won’t occur again.
Bitcoin Diamond was straightly forked from the primary Bitcoin client. The first focus of its expansion team was to permit users to remain even huge anonymous. In this sense, its purpose is very similar to Bitcoin Private. While the others all kept their total provide to 21 million coins, Bitcoin Diamond expand this by 10 times. Just like Bitcoin Cash, the highest block size was provide from 1MB to 8MB, and its transaction confirmation time is 10 minutes. Few people in the cryptocurrency community trust that Bitcoin Diamond is a scam, with many not jovial that the team didn’t even free a white paper. Forks are invented to make Bitcoins more secure and private.
Will Bitcoin always be number one?
Bitcoin is the oldest of the cryptocurrencies and has become the most popular so far. Currently there are more than 19000 cryptocurrencies. Bitcoin is the most popular among them and has the highest market cap. However, ever though Bitcoin is coming up to its tenth year of barter, transaction times are still very steady at reliable 10 minutes. Moreover, the network can only hold around 7 transactions per second and transaction fees show to be getting higher and higher. There are many of other blockchain scheme that can handle faster, cheaper and more active transactions, which makes them much extra suitable for a entire payment system. Although the Bitcoin team is looking to iron out this with the introduction of the ‘Lighting Network’ upgrade, there is no guarantee that it will be capable to clarify its performance levels. For usage, Bitcoin is the number one cryptocurrency in the world and its usage is increasing day by day. But it will not be accepted as the number one money guarantee. Because it has many limitations which will take some time to overcome.
Cryptocurrency is a virtual currency that was first introduced to the market by Bitcoin. Currently, the most popular crypto is Bitcoin with the highest market price. To improve and modernize Bitcoin is to fork Bitcoin, that is, to modernize the blockchain of its transactions within it. Moving ahead for the future, please just relive to do your private research before any looming Bitcoin forks, and don’t be misled by scammers that trial to take your personal keys! As always, humor let me know what your thoughts are on the forks I have specified, or whether you think Bitcoin will always be the number one cryptocurrency of popular. However, we know a lot about bitcoin forks we have to beware of scams or else we will be in big danger.