Finance

Bitcoin (BTC) Hard Forks

Everything you need to know about the most important versions of the King

Being decentralized by nature, Bitcoin (BTC) can be used and abused by anyone who has enough technical knowledge to fork the main chain and create his own version of the most famous cryptocurrency.

What is a Hard Fork?

Unlike a soft fork, which only implements changes to a single blockchain, a hard fork of any cryptocurrency means that a new chain, which follows a new set of rules, is irreversibly divided from the mother-chain. Those two still share the same history, but from the moment when forking takes place, they become entirely different ecosystems.

Because the new blockchain shares history with its predecessor, users who held a particular number of tokens on the mother-chain, usually get the equal amount of tokens on the new blockchain system.

Most Important Forks of Bitcoin and Their Main Characteristics

1. Bitcoin Cash (BCH)

The biggest and the most successful fork, Bitcoin Cash (BCH) brought the most controversy leading to, and after the forking, which happened on August 1st, 2017.

In the midst of the first stage of cryptocurrency expansion, Bitcoin started to look like Carl Lewis would if he raced Usain Bolt on Olympic Games in London 2012 – slow and inefficient.

Therefore, the Bitcoin community, after days of debate, decided to part ways.

Bitcoin Cash has the block size of 8 MB, without SegWit and “replace by fee” feature. Since forking the biggest cryptocurrency can be closely followed by malicious attacks, BCH implemented the “replay and wipeout” protection.

Its proof-of-work difficulty is adjustable more quickly than Bitcoin’s difficulty adjustment interval.

Bitcoin Cash is currently the fourth biggest cryptocurrency on the market with the $533 price tag.

2. Bitcoin Gold (BTG)

Motivated by the need to implement better ASIC protection, Bitcoin Gold (BTG) came into existence on October 24th, 2017, with Equihash algorithm instead of the Bitcoin’s standard SHA (Secure Hash Algorithm) 256.

Equihash mining algorithm, also used by Zcash (ZEC) (and all of its hard forks) and Komodo (KMD), ensures that ASIC miner machines, produced exclusively for crypto mining and used by large mining farms, are kicked out of the equation.

The team behind BTG explained that, by doing that, they ensured a more decentralized ecosystem where the hashing power is equally distributed across the network, as only GPUs, which are rarely used in mining farms, can excavate Bitcoin Gold.

Bitcoin Gold is ranked 26th on coinmarketcap.com, and an investor would have to pay $18,7 to acquire a single coin.

3. Bitcoin Private (BTCP)

Old Latin proverb states that nomen est omen, so Bitcoin Private (BTCP) was forked from the mother-chain on February 28th, 2018 to bring additional privacy options to Bitcoin users.

Like Bitcoin Gold, BTCP is using Equihash Proof-of-Work algorithm for ASIC resistance, while offering the option to generate either public or private addresses by using zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge).

Otherwise very similar to the original Bitcoin, Bitcoin Private occupies the 77th spot on the coinmarketcap.com’s list of cryptocurrencies and is valued at $3,71 per token.

4. Bitcoin Diamond (BCD)

On November 24th, 2017, Bitcoin was forked to create Bitcoin Diamond (BCD).

Like Bitcoin Cash, BCD uses larger, 8 MB blocks on its blockchain, but a different, optimized x13(GPU) mining algorithm, which also brings a substantial amount of ASIC resistance to the ecosystem.

Unlike all the previously mentioned forks which have the same maximum supply as Bitcoin (21 million), Bitcoin Diamon increased the maximal possible number of coins in existence to 210 million, which removes scarcity, but is said to bring accessibility for the average cryptocurrency investor.

Even though it lacks privacy features of BTCP, Bitcoin Diamond still sits at the reasonably high, 47th position, and has a price of $1,04 per coin.

Bitcoin (BTC) keeps the throne

Despite the fact that the most important Bitcoin forks have cheaper and faster transactions, larger blocks, ASIC resistance, or even more privacy, none of them can even come close to overtake The King of cryptocurrencies.

The eternal debate about the motivation behind constant forking is planting a seed of distrust towards such projects. Nevertheless, we have four forks of Bitcoin among the top 100 cryptocurrencies, which means that the old brick-and-mortar Bitcoin still provides great foundations to build upon.

Related post:

Thai SEC Issues Licenses To Seven Crypto Businesses

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Luka Kapetanic

An ex-restaurant business owner turned cryptocurrency fanatic, with over 12,000 followers on investfeed.com. Miner, Investor, trader and, above everything else - a writer, with coinlive.io, and cryptodigest.com in his jobs portfolio.

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