Bitcoin is the most popular cryptocurrency in the world, the first decentralized digital currency, and a bedrock for other cryptocurrencies that came thereafter. Since the release of its white paper in 2008 and its launch in 2009, it has remained the number one cryptocurrency till date. Its stability and success have encouraged the growth of cryptocurrencies today, as entrepreneurs and developers have repeatedly tried to model their cryptos in the line of Satoshi Nakamoto’s digital creation in order to achieve success. Bitcoin’s success, however, has attracted millions of followers who are part of the Bitcoin community. With such large number of followers, disagreements have arisen from time to time, and ways to resolve these arguments have been sought.
Disagreements that occur in the bitcoin environment are usually resolved with bitcoin forks. The creation of forks is not new, as there have been several forks both previous and upcoming forks, and this is not strange for Bitcoin.
Forks occur on a blockchain network when changes need to be made to the governing protocols of the network. Two types of forks exist; soft fork and hard fork.
In a soft fork, a change to the Bitcoin protocol is experienced where only blocks/transactions that were valid are made invalid, the network does not split. But a hard fork, on the other hand, is a radical change to the protocol, wherein the previously invalid blocks/transactions that were invalid, are made valid. There is a network split that leads to the creation of a new blockchain.
Popular Bitcoin Forks
The rate at which several Bitcoin forks have been forked after the entrance of Bitcoin, in 2017 alone, is stunning. While some are not well known, there are a few others that have become prominent. Many of these Bitcoin forks that have sprung up, however, claim that they were forked to correct the perceived weakness in the architecture of the original Bitcoin blockchain. Some of the issues that continue to plague the Bitcoin blockchain include slow transaction speed, scalability, lengthy transaction time, and the centralized mining. Initially, it was claimed that Bitcoin hard fork were based on a strong philosophical and technical ideologist. Recently, however, it is becoming perceived as a money-making machine. Below is a list of popular bitcoin forks.
Bitcoin Cash (BCH)
Bitcoin Cash was created to increase the bitcoin transaction capacity on the blockchain. It was created from the hard of Bitcoin. The fork occurred on August 1, 2017, at block height of 478559. This was the first Bitcoin fork. This caused the Bitcoin blockchain to split and the split created two blocks from block 478559 upward. The Bitcoin Cash works like Bitcoin, but way faster due to the increase in block size. There have been a lot of controversy around BCH because it’s promoter ( Roger Ver) has been socially attacking Bitcoin by misleading new users into beleiving BCH is Bitcoin by using bitcoin.com which he owns. Many people beleive BCH is miner centric ( Jihan Wu supports BCH) because as block size grows, mining would get more difficult for normal users and easier for corporations like Bitmain.
Bitcoin Gold (BTG)
Bitcoin Gold is a digital currency and a hard fork of Bitcoin. The hard fork occurred on October 24th, 2017 at block height 491407. Bitcoin Gold was created to return to the decentralized nature of the BTC, and give ordinary users an opportunity to mine the new digital currency. It was also created to address the increasing centralization of the mining industry that verifies and secures Bitcoin transactions. This was one of Bitcoin’s flaws. The purpose of the hard fork is the restore the mining functionality with common Graphics Processing Units (GPU) in place of mining with specialized Application-specific Integrated Circuit (ASIC), used to mine Bitcoin. The difference between Bitcoin Gold and Bitcoin is that Bitcoin Gold uses the memory hard equihash, as proof-of-work algorithm instead of the sha-256. Apart from this difference, the Bitcoin Gold follows the guidelines of the Bitcoin Core project. However, recently Bitmain released Antminer Z9 which is capable of mining Bitcoin Gold.
Bitcoin Diamond (BCD)
On the 24th of November, 2017, Bitcoin Diamond was forked off from Bitcoin blockchain at block height 495866. The Bitcoin Diamond sets to solve problems such as lack of privacy, slow transaction confirmations, and a high threshold for new members. The pseudonym names of the Bitcoin Diamond are Team Evey and Team 007. The cryptocurrency does not have much wallet support, other than the BitPie wallet. Bitcoin Diamond uses legacy signing for all non-SegWit transactions and SegWit transactions, it uses BIP143, unlike BTG and BCH which use BIP143 for all transactions. According to BCD developers though, the altcoin does not need Bitcoin blockchain as other forks of BTC do.
Super Bitcoin (SBTC)
Super Bitcoin is a hard fork that forked off Bitcoin at blockchain height of 498888 on December 12, 2017. Exchanges like OKEx, Huobi Pro, Coinut, CEX.com, BigONE and a few others have allegedly pledged support for this hard fork. Super Bitcoin’s total supply is supposed to be 21,210,000 SBTC, which is a little more than Bitcoin’s 21 million coins. The excess coins were pre-mined and held by the Super Bitcoin Foundation. The essence of this plan is to use these funds to encourage early developers, always ensure that the foundation continues to operate, and over time, grow the ecosystem. Other salient features of the Super Bitcoin include support for smart contracts, embedded zero-knowledge proofs to safeguard privacy, lightning network, scalability, as well as bigger blocks (block can be expanded to 8MB). Original Bitcoin holders, however, will be compensated with 1 SBTC for every BTC held.
The BitcoinX is a fork of the Bitcoin blockchain at a block height of 498888. The fork boasts of DPOS census which enables the fork to become more reliable, easier to use, and environmental friendly. It can build an ideal Bitcoin network that is suitable for the future society. It is highly expandable, has zero-knowledge proof that assures privacy.
Bitcoin Forks Becoming the New ICO
The number of Bitcoin forks and the rate at which they are forked could become the new cryptocurrency mania, especially for developers and miners. The term “Initial Fork Offering” is already in place, due to the rise of several Bitcoin forks within a short space of time. All that is needed is a strong community support for an idea that supposedly improves upon Bitcoin. It then becomes the basis for a fork that will eventually lead to the genesis of a new Bitcoin-derivative blockchain and also a new Bitcoin-based cryptocurrency.
The increase in the number of forks is, however, not without a reason. The continuous increase in the size of the Bitcoin community gives room for various ideologies in terms of economics, politics, philosophy, etc. and these things begin to manifest themselves within the Bitcoin community. Due to the fact that some of these ideologies are incompatible, disagreements are inevitable. There is continuous growth in the Bitcoin blockchain, thus creating the need for improvements, changes, modifications, and alterations from time to time. These changes are usually supported by some people, while some others might argue against these changes.
Another reason that could account for the increase and popularity of Bitcoin forks is that users are usually rewarded with free coins. Some of these forks reward users who have participated in the fork, with the equivalent of their Bitcoin holdings in BCH tokens. The way it works is that for every bitcoin held by a Bitcoin Cash participant, the user gets the same value in BCH in a 1-to-1 ration. This method has created fears this could be a use and dump system, as they feel that miners and developers could just take advantage of the system to acquire large token holdings and after the token grows in value, they dump them in massive selloffs.
What the Future Holds
The growth of Bitcoin forks and the craze around it does not seem to slow down, as more forks are slated for 2018. If there is anything that the entire record of the history of the budding cryptocurrency scene has shown, it is that once a cryptocurrency trend develops, many people jump on the bandwagon without proper investigation. It is almost certain that many fraudulent forks will spring up. However, forks like Bitcoin Cash have proven otherwise so far and it has shown that it is a fork that can be successful if done the right way and for the right reasons. The potential of these forks is still being questioned and time will tell if they will become trailblazers in the cryptocurrency market, or they will eventually be dumped into the cryptocurrency waste bin.