Forking a Blockchain: Bitcoin's many children
The year was 2008 when Bitcoin.com was first registered as a domain name. A little more than two months later, a white paper explaining Bitcoin as an electronic, peer-to-peer payment system was posted to an online group with a burgeoning interest in the cryptocurrency concept. Several months later, in January 2009, the Bitcoin code and blockchain were released.
Depending on how you view Bitcoin, that January day could be one of the most important days in cryptocurrency history. What started out as a revolutionary idea for ensuring online economic freedom has grown into an entire industry that now includes literally thousands of cryptocurrencies. Some of those cryptocurrencies are direct descendants of Bitcoin, being born of a fork in the original Bitcoin blockchain.
If Bitcoin were a man, we would be able to trace his descendants just by following each and every fork. Doing a family tree would clearly show that Bitcoin has hundreds of descendants. But guess what? Bitcoin has plenty of brothers and sisters, too. It is really fascinating to observe what a single digital monetary system has led to a decade later.
Forking the Bitcoin Blockchain
The coding brothers and sisters of Bitcoin are not what we want to focus on in this post. Rather, we will give our total attention to Bitcoin's direct descendants. These 'kids' all exist as the result of forking the original Bitcoin code.
What is a fork? In the software development arena, a fork is a new piece of software created by taking an existing section of code and moving it in another direction. Think of it in terms of a fork in the road. Before you get to that fork, you are on a single, continuous path. The fork splits that path into two directions.
One of the most prolific forks of Bitcoin is Bitcoin Cash. It came about as the result of a disagreement among a number of stakeholders concerned that transaction processing times were growing too long and becoming too cumbersome. In an effort to fix the problem, numerous stakeholders came up with different solutions. One such solution created Bitcoin Cash.
Up to the point of that fork, all of the stakeholders were philosophically aligned with the original Bitcoin code and blockchain. At the time the fork occurred, those stakeholders behind Bitcoin Cash didn't start out with an entirely new blockchain and core. They took what already existed and modified it beginning at the last block in the chain. Thus, they took both blockchain and core in a new direction without abandoning all of the blocks before the fork.
In the 10 years since Bitcoin's release, hundreds of forks have been created from it. Some of those forks are still active but without coins currently being traded. Others are active with coins in circulation. Still others died out before they ever amounted to anything.
5 Most Important Bitcoin Forks
Given that there are so many Bitcoin forks, it is reasonable to ask which ones are the most important. Which ones have had the most impact, and which ones are likely to stick around as long as Bitcoin itself? Well, we cannot predict the future of any Bitcoin fork or cryptocurrency. But we can present what we believe are the five most important Bitcoin Forks to date.
1. Bitcoin Cash (BCH)
You might be familiar with Bitcoin Cash if you have visited some of the casino links on Coinbet.com. Many of those casinos accept Bitcoin, Bitcoin Cash, and other cryptocurrencies. Perhaps you've even played Mega Moolah with Bitcoin Cash.
At any rate, Bitcoin Cash was officially launched during the summer of 2017. It is currently marketed as a platform that represents Bitcoin the way it was originally intended to be. Whether or not that's true is a matter of debate. Regardless, Bitcoin Cash was launched specifically to address three concerns of the original Bitcoin:
- High user fees
- Increasingly slower transaction times
- Energy consumption related to mining.
Bitcoin Cash developers addressed all three problems by incrementally increasing block size. The original 1 MB became 8 MB with the fork, then 32 MB in 2018. The increased block size was implemented alongside a few code modifications that made processing transactions faster, more efficient, and more scalable, all with less computing power.
The platform grew quite quickly after its initial launch. However, it wasn't without problems. Almost immediately, users found themselves confused between the original Bitcoin and the Bitcoin Cash fork. They began to see the latter as a less valuable variant perhaps not worth investing in. There were also questions about the new fork's decentralization.
Bitcoin Cash eventually gave birth to its own fork in late 2018. Due to philosophical differences over how to manage block size, Bitcoin ABC was born. Our previous analogy of Bitcoin as a man would suggest that Bitcoin ABC is his grandson.
It is worth noting that another Bitcoin grandson, Bitcoin Cash SV, was forked from Bitcoin Cash in an attempt to get back to the original principles of Bitcoin. Bitcoin Cash SV has shown surprising strength despite being so new to the cryptocurrency space.
2. Bitcoin Gold (BTG)
At the same time some members of the Bitcoin community were working on Bitcoin Cash, another faction was working on a second fork known as Bitcoin Gold. Their issues with dad were different. Rather than transaction speed, high fees, and power consumption, Bitcoin Gold developers were concerned about:
- Centralization - Despite being built on a foundation of decentralization, Bitcoin Gold developers felt like the platform was being controlled by just a small handful of miners with the financial resources to pay for the equipment and power required by mining. To those developers, the platform was being centralized under those miners.
- Business Influence - Along with the small number of miners controlling most mining activity came an undue amount of business influence. Mining became a business enterprise that brought in other business interests. Bitcoin Gold developers felt this was corrupting the original intent of Bitcoin.
- Mainstream Adoption - Finally, Bitcoin Gold developers believed it was taking too long for Bitcoin to gain mainstream adoption among merchants and buyers. They believed things could be accelerated if someone was willing to create a virtual marketplace and a friendlier platform.
Bitcoin Gold successfully forked and gave Bitcoin (BTC) owners one-to-one value on the new platform. It has done fairly well on the open market ever since.
3. Litecoin (LTC)
Litecoin is a little bit different in terms of the way it was created. Where Bitcoin Cash and Bitcoin Gold were hard forks of Bitcoin's blockchain with modified code, Litecoin was a hard fork of the Bitcoin Core application. As such, it did not include the Bitcoin blockchain when first released. Litecoin developers started with a clean, fresh blockchain with all new coins.
Having said that, the fact that Litecoin is a hard fork of the Bitcoin Core does make it a descendant of Bitcoin in principle. But it would be fair to consider Litecoin the black sheep of the Bitcoin family. There are significant differences between how the two cryptocurrencies actually work.
For example, the underlying code that powers the Litecoin blockchain is capable of processing a block in just over 2 minutes. At the time of the fork, Bitcoin's blockchain took nearly 10 minutes to process a single block. That is a significant difference.
Another difference between the two is the proof-of-work required to decrypt and confirm transactions. Litecoin's proof-of-work algorithm requires more memory but less power. It also requires more expensive hardware setups for mining purposes.
Despite the differences, Litecoin has maintained a strong position in the cryptocurrency space. It has long been considered one of the few cryptocurrencies that can compete with Bitcoin.
4. Bitcoin Diamond (BCD)
The developers of Bitcoin Diamond created their fork in November of 2017. Like the rest of Bitcoin's kids, this particular fork was the result of a number of developers within the Bitcoin community believing they could improve the platform by making a few changes. Bitcoin Diamond was created to:
- increase transaction speed
- reduce fees
- make mining more inclusive.
The general impetus behind Bitcoin Diamond was to return cryptocurrency to the hands of the people rather than allowing a small number of powerhouse miners to determine the direction it would take.
5. Bitcoin Interest (BCI)
Bitcoin Interest makes our list because of its underlying philosophy being so drastically different from the original Bitcoin. It was forked out of a desire to create a global digital payment system that would actually encourage people to save rather than simply buy and sell.
The platform encourages people to buy tokens and then park them. Parking allows them to earn interest as part of the platform's interest pool. The amount of interest earned is linked to the number of user coins parked compared to the total number of parked coins during a specific period of time known as the 'interest round'.
It is amazing to consider how many forks have been produced from Bitcoin's blockchain and code. If Bitcoin's original developer is still alive, he or she must take immense pride in seeing how so many blockchain projects have been spawned from a simple desire to create a decentralized monetary system accessible to all.