Learn What Are Bitcoin Forks? [The Ultimate Step-by-Step Guide]

The Bitcoin Cash blockchain was officially launched on 1 st August Just like Bitcoin, the Bitcoin Cash supply is limited to 21 million coins and each block takes 10 minutes before it is confirmed. On the other hand, as the maximum block size was increased by eight times, it allowed the Bitcoin Cash blockchain or Bitcoin fork to scale more transactions. Scalability or scaling is the maximum amount of transactions that a particular blockchain can process every second. Bitcoin is very limited in this sense as it can only process an average of 7 transactions per second.

This is one of the things that are currently letting Bitcoin down — if it is going to be used as a global payment system, it must improve its scalability performance. Source: cointelegraph. Due to the changes that were implemented after this Bitcoin split, Bitcoin Cash can process about 61 transactions per second. What this means is that if you held 0. Since this Bitcoin fork was launched, it has been a very successful project. In fact, at the time of writing in June , it is the fourth most valuable cryptocurrency in the industry.

The main person behind the Bitcoin Cash project is a well-known cryptocurrency investor called Roger Ver. Ver, often referred to as "Bitcoin Jesus", believes that Bitcoin Cash is actually the "Real Bitcoin", and he thinks it will overtake Bitcoin as the number one cryptocurrency. Bitcoin is the most important invention in the history of the world since the internet. So, now that you know about the Bitcoin Cash fork, the next Bitcoin hard fork that I wanted to discuss is Bitcoin Gold.

While Bitcoin Cash was concerned with reducing transaction fees, the people behind Bitcoin Gold wanted to make Bitcoin more "decentralized". This is because the vast majority of Bitcoin mining is controlled by just a few pools in China. Once the Bitcoin reward is won, it is divided between the pool, based on how much each person has invested.

How to split your coins using Electrum in case of a fork — Electrum documentation

Ultimately, this gives the people running the mining pool lots of power and influence over the network, which is why some believe that this Bitcoin fork has become too centralized. In the early days before mining pools became dominant, it was possible to mine Bitcoin by using a basic CPU or GPU, meaning that anybody could do it in the comfort of their own home. Those days are now long gone if you want a chance of winning the reward — not only do you need to be part of a mining pool, but you also need to own really expensive ASIC hardware.

What are Blockchain Forks?

But guess who manufacturers a lot of the mining hardware? One of the largest mining pools in the industry! In response, Bitcoin Gold installed a new mining process that makes sure that specialized and expensive hardware cannot be used to increase somebody's chances of winning the mining reward. If a Ferrari raced 10 Mini Cooper's, which car do you think would win?

The ultimate guide to Bitcoin Forks

Well, obviously the Ferrari as it has the most powerful engine! However, Bitcoin Gold changes things so that instead of a Ferrari being in the race, there are just 10 Mini Coopers, giving everybody a fair chance of winning. However, instead of taking 10 minutes like Bitcoin, Bitcoin Gold can confirm a transaction in just 2. The other major difference is the way that miners verify transactions. Just like the Bitcoin Cash fork, anyone holding Bitcoin at the time of the launch received identical amounts in Bitcoin Gold. Since it was launched, Bitcoin Gold has also performed really well.

This attack is actually quite ironic because the whole point of Bitcoin Gold was to prevent centralized miners from gaining too much control. Its founder and main developer, Rhett Creighton, also created ZClassic and since then, others have joined the team. The idea Creighton had was to combine the privacy and secrecy of ZClassic with the security and popularity of Bitcoin. In total, there will be a maximum supply of 21 million BTCP coins. The block size is double the size of Bitcoin at 2MB and it is also able to confirm a transaction four times faster.

Furthermore, just like Bitcoin fork BTC Gold, the mining mechanism has been modified to prevent people from using expensive hardware, meaning that it is a much fairer and equal network than Bitcoin. To clarify, it also uses the Proof-of-Work consensus mechanism. Not only is Bitcoin Gold much faster and fairer than the original Bitcoin, but as its name suggests, it also allows more private transactions too.

Although each movement of funds is still posted to the public ledger, both the sender and the receiver remain private. This is slightly different from the original Bitcoin, as although the real-world identity of the sender and receiver are not revealed, it is possible to find out how much a certain Bitcoin address has. Not only that, but you can also see how much a particular address has sent and received in the past. Bitcoin Diamond was directly forked from the original Bitcoin client.

The main focus of its development team was to allow users to remain even more anonymous. In this sense, its purpose is very similar to Bitcoin Private. When it was first launched in November , Bitcoin Diamond distributed their coins in a slightly different way to the other Bitcoin forks I have mentioned. While the others all kept their total supply to 21 million coins, Bitcoin Diamond increased this by 10 times.

As a result, if you held 0. Just like Bitcoin Cash, the maximum block size was increased from 1MB to 8MB, and its transaction confirmation time is 10 minutes. Some people in the cryptocurrency community believe that Bitcoin Diamond is a scam, with many not happy that the team didn't even release a white paper. If you have read this Bitcoin Fork guide up to this point, you now have a good idea of the most popular forks that have happened so far.

Before we move on, take a look at the below comparison chart, which compares the main features of the different forked blockchains. Looking for more in-depth information on related topics?

Bitcoin forks explained

We have gathered similar articles for you to spare your time. Take a look! Not sure how to buy Ripple XRP? Wondering where and how to get some NEO coins? Find your best places to buy NEO Coin with clear instructions on how to do that! Before I continue, I want to mention a few important things that you should consider if you are holding Bitcoin and expecting some free coins from any upcoming Bitcoin forks. Anonymous Bitcoin: This project is looking to combine Proof-of-Work and Proof-of-Stake to improve the way transactions are mined.

Definition & Examples of Bitcoin Forks;
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BitcoinZeroX: This Bitcoin fork date is scheduled for September , however it is yet to be confirmed. The fork will be a combination of Bitcoin and Hexxcoin. As you probably know, Bitcoin is the first and original cryptocurrency. When it was launched in , the main purpose of Bitcoin was to create a global payment system that could be used by anyone in the world, without needing transactions to be confirmed by a third party. However, even though Bitcoin is coming up to its tenth year of trading, transaction times are still very slow at just 10 minutes.

Furthermore, the network can only handle around 7 transactions per second and transaction fees seem to be getting higher and higher.

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Bitcoin Fork: History and Upcoming Bitcoin Forks;
🤔 Understanding a bitcoin fork!

There are lots of other blockchain projects that can handle faster, cheaper and more efficient transactions, which makes them much more suitable for a global payment system. Although the Bitcoin team is looking to solve this with the introduction of the 'Lighting Network' upgrade, there is no guarantee that it will be able to solve its performance levels.

Instead, I think the majority of people will use Bitcoin as a 'Store of Value'. This is similar to a real-world asset like Gold or Silver. However, this is only my personal opinion. I could be right or I could be completely wrong! Best Bitcoin mining hardware: Your top choices for choosing the best Bitcoin mining hardware for building the ultimate Bitcoin mining machine.

Wondering what is SegWit and how does it work? Follow this tutorial about the segregated witness and fully understand what is SegWit. Hopefully, you have read it all and now you should have a really good understanding of what a fork is and the reasons why they happen. I have also listed 4 of the most popular cryptocurrencies to have been forked from Bitcoin. Electrum version 2. Notice how the branches have different hashes at different heights.

You will now have coins seperately spendable on each chain. If it failed, no harm done, you sent to yourself!