Understanding all Bitcoin forks
The decentralized cryptocurrency, Bitcoin has undoubtedly been at the core of the cryptocurrencies, but the original version of the cryptocurrency had some issue. There were only a limited as well as a lesser number of transactions that could be inserted into a block. Bitcoin forks basically refer to the change in the protocol and thereby making the blockchain previous rules valid or invalid. In other words, they are nothing but updates to the protocol. There are two kinds of forks that are available, a soft fork and a hard fork.
A number of the forks can bring a significant amount of change in the Bitcoin protocol but the key difference is that a soft fork is a change in the rules of a Bitcoin protocol that is compatible backward that is the new rules will still be completely implemented with the previous protocol.
Whereas on the other hand, a hard fork also is a change in the rule of a software but the changes is not compatible backward unlike the soft fork. This simply means that a hard fork splits the Blockchain from the legacy version before the fork had occurred.
A number of Bitcoin forks have been initiated in order to increase its performance. There were three Forks that were conducted for software clients of the Bitcoin network in order to improve its functioning.
- Bitcoin XT
- Bitcoin Classic
- Bitcoin Unlimited
All these 3 software client changes were done in order to increase the capacity of the transaction but they were not of much use as the hash power did no use these and hence the consensus did not adopt it to change the rules.
However, on the other hand, three hard Fork have been conducted on Bitcoin. The forks shared the same transaction history of Bitcoin blockchain up to a certain block, after that, implementing its own rules and regulations in the creation of new blocks.
The three hard forks are as follows:
1. Bitcoin Cash
On 1st August 2017, this particular fork was done at block number 478558 of the Bitcoin Blockchain. This particular fork was mainly done in order to increase the block size of the current Bitcoin blockchain.
The issue dates back to 2016 where the exponential increase in the transaction fees and also the higher transaction time was taken by the current Bitcoin blockchain network due to the limited number of transactions in a block forced some of the community members of the Bitcoin blockchain network to initiate a hard fork. The result of the hard fork was that each user got the same amount of Bitcoin cash as the number of Bitcoins they had.
2. Bitcoin Gold
On 24th October 2017, this particular fork was done at block number 491407 of the Bitcoin Blockchain. The main aim of this particular fork was to shift the mining industry from the use of Application Specific Integrated Circuits to the Graphics Processing Unit. In other words, the difficulty level of mining was intended to be reduced. The Hash Function for this particular fork changed to Equihash from SHA-256.
The main concern here was to decentralize back the mining process. As mining was very difficult and only a few huge Institutions were doing it. Hence the mining was somewhat centralized in contrast to the decentralized nature of the cryptocurrencies, hence in order to make the mining easier and affordable for normal people this particular fork was initiated. Anyone who owned 1 Bitcoin (BTC) was given 1 Bitcoin gold (BTG).
3. Bitcoin Private
On 28 February 2018, this particular fork was initiated at block number 511346. In this particular Bitcoin network, there is some kind of privacy provided to the customers. There is an option to make the sender, receiver and the transaction information private which is not the case of the basic Bitcoin blockchain Technology where all the information is fully transparent.
The Bitcoin private network incorporates the hash function Equihash which is a proof of work mechanism making it memory intensive as well as ASIC proof. Hence it effectively decentralizes the mining industry. Each owner of Bitcoin (BTC) got the respective amount of Bitcoin private (BTCP) coins.
Another hard fork was supposed to happen but was canceled immediately before the fork could take place. It was SegWit 2x. It consisted of 2 parts. The first one was to activate the segregated witness in August 2017 and later on initiating a hard fork to increase the block size to 2 megabytes. Any number of forks can be made in order to solve the issues of the Bitcoin Network. Furthermore forks can be expected in future in order to improve the performance of the Blockchain network.