in Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin SV (BSV)
What is a Fork in Bitcoin?
Bitcoin (BTC) is the first and oldest cryptocurrency, having survived more than a decade, which is like 100 years in the fast-moving cryptocurrency industry. However, it hasn’t been without its detractors who claim that their own versions of Bitcoin are better or true to its original purpose. These crypto assets that look similar to BTC (e.g. Bitcoin Cash, Bitcoin SV) are called Bitcoin forks, but what exactly does it mean to be a BTC fork?
Soft Fork vs. Hard Fork
The thing with forks is that there are two kinds: soft forks and hard forks.
A soft fork is a change in a cryptocurrency protocol that is backwards compatible with nodes running old software (nodes are computers or servers that store the blockchain, or record of transactions). An analogy for a soft fork might be upgrading your phone’s operating system.
Let’s say the new iOS 15.0 lets you send BTC via text message (!). Users running the older iOS 14.0 would still be able to send and receive text messages, but they wouldn’t be able to use the new Send BTC feature of iOS 15.0.
A hard fork is a change in a cryptocurrency protocol that is not backwards compatible. All nodes have to update to the new version. If they don’t, a split can occur, resulting in the creation of a new cryptocurrency.
A BTC fork example of this was the Bitcoin Cash (BCH) hard fork. Bitcoin Cash increased the size of Bitcoin blocks (1 block contains many transactions) from 1 megabyte to 8 megabytes in an effort to solve the Bitcoin scalability problem, or Bitcoin’s inability to handle large amounts of transactions.
This change was incompatible with the original Bitcoin, also called Bitcoin Core, whose community prefers smaller blocks so that storage requirements to run a node remain on the smaller side, allowing for more people to run nodes and increase network decentralization.
Due to BTC users sticking to small blocks and BCH users sticking to big blocks, there was a split of the original BTC into BTC and BCH.
Bitcoin Fork History
Bitcoin Cash is but 1 of many Bitcoin forks that have split from the original Bitcoin. While there have been countless Bitcoin forks since Bitcoin’s launch in 2009, here are some of the most prominent ones and what they tried to achieve.
Bitcoin XT was one of the earlier Bitcoin hard forks that achieved some popularity. Launched in late 2014, it was proposed by Mike Hearn, an early Bitcoin developer, who wanted to improve Bitcoin’s scalability by increasing the blocksize to 8 megabytes from 1 megabyte.
Of course, this is what Bitcoin Cash later achieved in late 2017. At the time though, Bitcoin XT failed to get significant traction. Perhaps it was too early for its time (Bitcoin was seeing much more congestion towards the end of 2017 - BCH was released in August 2017 - due to its inability to scale).
With Bitcoin XT’s decline by the end of 2015, other members of the community sought to bring their own big-block BTC solution to the table in an effort to scale Bitcoin. Known as Bitcoin Classic, this solution launched in early 2016 and increased the blocksize from 1 megabyte to “only” 2 megabytes.
However, Bitcoin Classic, too, lost support and eventually faded away like its predecessor Bitcoin XT.
Bitcoin Unlimited was yet another Bitcoin fork that dealt with blocksize. However, instead of imposing a set blocksize from the start, Bitcoin Unlimited took a different approach: it allowed users to choose a blocksize to accept. The blocksize that achieved majority consensus would become the new blocksize limit.
Unfortunately, Bitcoin Unlimited fell victim to a number of bugs, which made users lose faith in the protocol and eventually abandon it.
Bitcoin Cash Fork
Bitcoin Cash arose in response to Bitcoin’s inability to scale (again) and disagreements with a scalability proposal known as SegWit, a soft fork that made transaction sizes smaller by separating signature data from transaction data.
Members of the Bitcoin community, including prominent figures like Roger Ver, early Bitcoin investor and evangelist, as well as Jihan Wu, Co-Founder of Bitmain, the world’s largest Bitcoin mining device manufacturer, created Bitcoin Cash.
Bitcoin Cash, like Bitcoin XT, increased the blocksize limit to 8 megabytes. Unlike Bitcoin XT however, Bitcoin Cash was able to stick around and is one of the top cryptocurrencies today.
Perhaps this was due to the support of prominent figures like Ver and Wu and also due to the fact that Bitcoin started to deal with much more scalability issues in 2017 than in 2014, as the network started to gain mainstream popularity.
Bitcoin Gold Hard Fork
The Bitcoin Gold hard fork followed in the months after Bitcoin Cash. Bitcoin Gold wanted to make mining more egalitarian by limiting mining to consumer graphics cards, thereby excluding expensive ASICs (specialized mining devices) that had taken over Bitcoin.
Although Bitcoin Gold hasn’t disappeared like Bitcoin XT, Classic, or Unlimited, it has unfortunately suffered from major security problems, having been victim of a 51% attack multiple times!
A 51% attack is when a malicious actor or group gains 51% (majority) control of a network’s mining power to do things like block certain transactions and spend the same crypto twice by spending it once, reversing the transaction, and spending it again (“double spend”).
Honorable Mention: Bitcoin SV
Although Bitcoin SV is technically not a Bitcoin fork (it’s a Bitcoin Cash fork), we thought it was worth a mention because of how popular it’s grown. It’s one of the top cryptocurrencies by market capitalization (measure of a crypto’s value by multiplying the number of an asset in circulation by the asset’s price). In addition, it even “flipped” or overtook Bitcoin Cash at one point to lead BCH in market cap!
Bitcoin SV, of which SV stands for “Satoshi Vision”, wants to bring back Bitcoin creator(s) Satoshi Nakamoto’s original “vision” of massively scaling Bitcoin on-chain (by raising the blocksize limit).
Upcoming Bitcoin Forks: BTC Fork Dates
Want to know upcoming Bitcoin fork dates? While most BTC forks fade into oblivion, some become quite prominent (and valuable) like Bitcoin Cash and Bitcoin SV.
Here are some Bitcoin forks lists where you can learn about upcoming forks:
How to Claim Bitcoin Forks
While most Bitcoin forks are worthless, you might want to claim some of them if not to support them but at least profit from them.
Instructions for claiming forks vary from wallet to wallet, but the key thing you need to know is that if you don’t control your Bitcoin private keys, you won’t be able to directly access forked coins yourself unless whoever controls your keys, such as a centralized exchange, allows you to.
In some cases, centralized exchanges and other entities that control your keys have been known to delay access to forked coins (with the coins becoming useless by the time they’re accessible) or not granting users access to forked coins at all!
Remember, as the saying goes:
Not your keys, not your crypto.
If you’re an Exodus user (who isn’t! 😉), here’s how you can claim your forked coins. (Do note that in some tax jurisdictions, hard forks means paying taxes on your crypto).
Bitcoin’s popularity has spawned the creation of thousands of crypto assets, some of which even bear the Bitcoin name and are forks, or splits, of the original Bitcoin.
While there have been many Bitcoin forks already, we likely haven’t seen the last of them, as more and more people try to cash in on the Bitcoin name or legitimately try to improve upon the Bitcoin protocol.
Although not all will last, some probably will.
Who knows? Maybe one of them will become the next Bitcoin. 😉
Every Bitcoin holder needs a safe & secure Bitcoin Wallet. Download yours for Desktop or Mobile today free. Get access to the live Bitcoin Price and Bitcoin News, exchange Bitcoin with other Bitcoin forked coins such as Bitcoin Cash & Bitcoin SV all in one Bitcoin Wallet app. Stay connected and updated whilst you are on the go! Download for free the Exodus Android Bitcoin Wallet or the Exodus Apple iPhone Bitcoin Wallet.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.