What is a Bitcoin Fork (Fork)?
Bitcoin fork is a phenomenon that has accompanied Bitcoin since its inception, resulting in over a hundred such projects, all with varying degrees of success and relevance.
Some of the projects are still under development and have no tradable currency, while others are relegated to existing as bits of Bitcoin history.
In the following guide, we will focus only on the most relevant and/or interesting forks, restricting our treatment of them only to those that are being traded from November 2018.
What is a Bitcoin Fork?
Bitcoin fork is another version of Bitcoin with some changes to the original network protocol. At the most basic level, a fork happens when a blockchain splits into two (or more) potential paths forward.
This could be due to differences in network transaction history or addition of new rules in the code.
Simply put, anyone can shell out Bitcoin. Due to its open source nature, anyone can copy Bitcoin code and release their own version of Bitcoin with slightly different rules.
However, this does not mean that all network participants (us) will follow you and mine your Bitcoin fork instead of the original Bitcoin (BTC).
The real power of Bitcoin lies not in the code but in the people who agree with its rules, and even today Bitcoin's network effects are nearly impossible to replicate.
However, that doesn't mean that people haven't tried to create their “enhanced” version of Bitcoin. Here are some of the best known Bitcoin forks.
Bitcoin Cash (BCH)
One of the strongest among Bitcoin forks, Bitcoin Cash (BCH) introduces itself as Bitcoin as-it's meanant-to-be. BCH was launched in August 2017, in response to what Roger Ver and his band of miners unhappy with Bitcoin perceived as the main problems with the “mother” currency:
- Slow transaction times
- high fees
- High energy consumption
What Bitcoin Cash did to resolve these issues was change the Bitcoin block size from 1MB to 8MB, followed by 32MB in mid-2018.
This should make the verification process faster regardless of the number of mines that serve to support it.
Modifications to the original protocol allowed for the shortening of transaction procedures and created the potential for the network to scale more efficiently in parallel with the increase in the number of its users.
Bitcoin Cash soon became one of the top ten currencies by market capitalization, ranking 4th in November 2018.
This success came against a number of problems the currency initially faced, including:
- Being confused with Bitcoin for sharing a similar logo and having its origins in the same community
- It is sometimes described as a "low-end" variant of the currency from which it bifurcated
- Centralization with Bitcoin Cash was seen as a more prominent issue compared to Bitcoin
Despite these challenges, Bitcoin Cash eventually prevailed, only to come face to face with another problem: conflicting attitudes about block size among its community members. Eventually, the community split into two main camps on November 15th.
Those who chose to “protect” Bitcoin Cash from implementing overly radical changes to block sizes now represent the Bitcoin ABC faction, with ABC standing for “Blocksize Cap”.
They are led by Roger Ver and mining hardware manufacturer Bitmain. As of November 2018, BCH ABC appears to be gaining the upper hand, with its accumulation of more proof-of-work (PoW) and winning several major exchanges.
Bitcoin Cash Price
Bitcoin SV (BSV)
Bitcoin SV (BSV, with “SV”, means “Vision of Satoshi”) is the other big fork of Bitcoin Cash who established itself as a stand-alone cryptocurrency with a mission to defend what its creators claim to be the original vision of the enigmatic founder of Bitcoin.
The coin was developed by blockchain development company nChain, with support from Craig “Faketoshi” Wright.
His group supported the Bitcoin Cash fork in a quest to rediscover and restore the “original” Satoshi protocol, which would allow it to increase the BCH block size from the current 32MB to 120MB.
This will likely increase network capacity and allow for better scalability compared to what Bitcoin Cash (in itself a fork) was able to offer.
Although the dust from the recent bifurcation war has not yet settled, Bitcoin Cash SV recently made its way to the top of the Top 10 list, with its market capitalization reaching $1,6 billion at the end of November 2018.
Its proponents claim that losing the BCH ticker was unimportant and that BSV will be accepted by most projects and businesses in the coming years as it will eventually conquer the Bitcoin Cash native app ecosystem.
Bitcoin SV price
Bitcoin Gold (BTG)
Bitcoin Gold (BTG) was brought into being by members of the Bitcoin community who strived for the hard fork with the hope of fixing the following issues with Bitcoin:
- Bitcoin Gold proponents felt that the Bitcoin network had become too centralized. This was best seen in the case of mining, with specialized hardware giving undue advantage to the miners who use it. This particularly referred to the use of application specific integrated circuits (ASICs) for the mining taking place on your blockchain.
- As a “cure,” the Bitcoin Gold team implemented the Equihash hashing algorithm, which made it less advantageous to work with ASIC-based hardware.
- In addition to the dominance of specialized mining hardware, the Bitcoin ecosystem is increasingly seen under the sway of large companies armed with powerful mining platforms. To maintain Bitcoin's initial vision as a fully decentralized point-to-point system, Bitcoin Gold made it possible for miners to acquire coins using everyday unskilled hardware such as graphics processing units (GPUs).
- Bitcoin adoption by merchants is considered time-consuming. To accelerate this process, Bitcoin Gold developed the BTGPay solution as a platform and virtual marketplace for merchants who accept Bitcoin Gold. At the same time, this network brings together diverse stakeholders such as payment service providers and e-commerce integrators that work to facilitate the adoption and use of this cryptocurrency.
When the forking procedure was completed, each BTC owner received the same amount of Bitcoin Gold in a 1:1 ratio.
Bitcoin Gold Price
Bitcoin Diamond (BCD)
Bitcoin Diamond (BCD) is yet another Bitcoin fork that was implemented in response to the perceived deficiencies of its original currency. Bitcoin Diamond was created in November 2017 by Bitcoin miners under the name “Team Evey” and “Team 007” who saw the fork as a way to make changes to the Bitcoin Core protocol in the following segments:
- Bitcoin Diamond fork aims to provide faster transaction confirmations. To achieve this, Bitcoin Diamond deployed Lightning Network as its second-tier payment protocol in July 2018. Lightning Network supports real-time transaction processing by having a portion of them occur outside the blockchain, with the intelligent contract system being responsible for its management. The blockchain itself is responsible for handling the confirmation of the final state of these transactions. The Lightning Network implementation was also carried out in support of Bitcoin Diamond's ambition to become the cryptocurrency of choice for frequent payments involving high and low values.
- Faster transactions should be followed by offering much lower rates. Bitcoin's inability to deliver on its promise of creating an affordable trading system was seen as its “original sin” against Satoshi Nakamoto's vision. This was made worse by having high payment limits for potential new users. To combat this, Bitcoin Diamond has reduced its fees and strengthened the original platform's ability to handle transactions. Bitcoin Diamond has also increased the total supply of its coins to 210 million BCD in order to make its acquisition more affordable for an average user (compared to 21 million BTC). Those who had 1 BTC before the fork had their token changed to 10 BCD after the fork.
- Mining must be more inclusive. To that end, the Bitcoin Diamond team removed Bitcoin's iconic SHA-256 algorithm to decentralize the entire mining procedure.
- Bitcoin Diamond's X-13 makes life much more difficult for owners of specialized mining hardware, putting them in what the BCD developers describe as an unfairly advantageous position over regular miners.
Bitcoin Diamond Price
Bitcoin Lightning (LBTC)
Bitcoin Lightning (LBTC) emerged as the fork of the Bitcoin blockchain in December 2017. The main advantage of Bitcoin Lightning is its desire to combine the benefits of Bitcoin and Ethereum to create a more versatile and efficient blockchain.
The LBTC team sought to offer several distinct features that would no doubt put it ahead of competing forks and other cryptocurrencies.
- Autonomous Digital Democracy. Lightning Bitcoin's chain governance system includes all token holders in its blockchain network and turns them into actors whose vote is treated as equal in the decision-making process. LBTC uses the Consensus Mechanism DPoS which serves as the foundation of its “digital democracy” ecosystem and avoids the risks associated with Proof-of-Work systems.
- Decentralization. The same DPoS mechanism makes it possible for LBTC holders to choose among 101 nodes in order to guarantee transaction validation. Token holders can also vote to designate “accounting nodes” that are named based on the weighted votes received. The expansion of token owners' voting rights is seen as an instrument to promote the decentralization of the LBTC network.
- Scalability. Bitcoin Lightning hopes to achieve a higher level of scalability with the help of DPoS and limiting the number of validators on its blockchain.
- Fast transactions. Based on the LBTC protocol, the ultimate goal of Lightning Bitcoin is for payments to be processedin a matter of seconds. A limited number of verification nodes paired with the 2MB block size should shorten the time needed to reach consensus to seconds and thus provide higher transaction speeds. The maximum number of transactions the LBTC intends to process is around 24 million per day.
- Accessibility. Transaction fees with Bitcoin Lightning can start at 0,00001 LBTC per transaction.
Bitcoin Interest (BCI)
Bitcoin Interest (BCI) was a fork of Bitcoin in the spring of 2018 with the goal of creating a new global payment ecosystem that will focus on savings management.
This will arguably be achieved with the implementation of technology that will allow users to earn interest on the coins they own (“park”), similar to what real-life banks offer with their savings accounts.
The technology that will make it possible is focused on three main areas:
- There is a Bitcoin interest pool: Blocks on the Bitcoin Interest network have a two-reward system, with the larger share going to the miner and the smaller portion being included in the interest pool. This pool is used to make interest payments to users who choose to “park” their coins. Although BCI initially used the Equihash algorithm for mining, it switched to ProgPoW in September 2018 to mitigate the advantages enjoyed by users of ASIC hardware.
- Interest rounds: Users can choose weekly or monthly interest periods to park their coins and recover their share of the interest pool. Those who choose to park their coins must do so during an interest round. There is still the option to move the coins before this round expires, but this will prevent the user from receiving interest payments.
- Interest rates are not fixed: BCI's interest rate depends on the number of coins users choose to park and the number of coins parked in the interest round. The system constantly checks how long the coins are parked throughout these rounds. Once the round has expired, it will distribute the balance of the interest pool to the coin holders in proportion.
BitcoinX (BCX) a fork of the Bitcoin blockchain in December 2017 with a mission to combine Bitcoin achievements with new features:
- BitcoinX is highly expandable, which is achieved through the implementation of smart contract technology. This technology should reduce the high fees associated with its predecessor, while transaction processing efficiency should be helped by its 2-minute block intervals.
- BitcoinX wants to offer better privacy and security features based on the combination of existing Bitcoin networking technology with a zero knowledge proof system.
- Cross-chain development is another area BitcoinX intends to focus on. It should allow the exchange of data between multiple chains to create an umbrella ecosystem for application development.
- The total supply of coins was limited to 210 billion, with each BTC holder receiving 10.000 BCX for a single ownership token.
Super Bitcoin (SBTC)
Developed under the motto “Make Bitcoin Great Again”, Super Bitcoin (SBTC) sought to offer better privacy and scalability compared to Bitcoin, in addition to implementing smart contract functionality. The fork took place in December 2017, with 1 SBTC credited for each BTC owned at the bifurcation point.
Super Bitcoin aims to differentiate itself by designing its resources based solely on the demands of its community members. Until now, this had to do with:
zero knowledge proof system à has been implemented to strengthen privacy features.
Supported smart contracts must become Turing-complete to allow for better system functionality as well as to allow it to enhance the scalability of your platform.
c) Larger blocks
Block size with Super Bitcoin has been increased to 8 MB.
In mid-2018, the team behind Super Bitcoin announced its rebranding as Nash Blockchain Platform.
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