Nov 07, · Bitcoin forks create a great deal of confusion in the cryptocurrency community. While forks may be complicated, they are a necessary part of the blockchain development process and are critical in manifesting the decentralized future that blockchain aims to achieve. With the right knowledge, crypto forks are simple and easy to understand. Cryptocurrencies: | Market Cap: $,,, | 24h Vol: $20,,, BTC Dominance: % Markets: Jun 25, · Bitcoin XT was one of the first notable hard forks of bitcoin. The software was launched by Mike Hearn in late in order to include several new features he .
Planned bitcoin forksBitcoin Blockchain Forks History – List of All BTC Hard & Soft Coins?
If they are not installed, an application may not work at all. The same rule works for the blockchain industry. A cryptocurrency fork is an event that happens when a blockchain needs some software updates or even crucial changes to the protocol of a cryptocurrency. A fork can be planned or unplanned. There is also a great difference between a hard fork and a soft fork, which will be observed below.
As can be seen from the name, planned forks are those types of forks that are planned to be released by developers. The team behind a decentralized project planning to fork the blockchain usually announce an upcoming fork, introduce a fork calendar, or add this event to the roadmap.
On the contrary, unplanned forks are usually unexpected. Sometimes, miners can simultaneously discover the same block. The mining process continues, and blocks are added to new branches of the chain.
The issue resolves simply: the branch with the most mined blocks survives, while another one with the least blocks does not operate. However, it is always a good idea to refresh the knowledge base.
Miners of a particular decentralized network are essential parts that discover new blocks, validate transactions, and just maintain a healthy environment within the blockchain. In order to produce the next block and add it to the blockchain, miners have to reach a consensus. Every serious protocol or any other update needs to be approved by the majority of miners. Once updates are accepted, a blockchain starts to work in a new way according to the changes.
It is a cryptocurrency hard fork. A hard fork is a significant update to a blockchain that is not backward compatible with the old version of a blockchain. This means that miners who disagree with new mandatory changes to a protocol will not be able to mine blocks until they install updates. New blockchain can appear due to hard forks like it was with Bitcoin and Ethereum.
We are going to observe these cases down below. For a better understanding of a hard fork, let us provide examples of crucial changes that occurred within Ethereum and Bitcoin networks.
One of the most well-known forks that happened in the crypto industry is Ethereum. Bitcoin cash remains the most successful hard fork of the primary cryptocurrency. As of this writing, it is the fourth-largest digital currency by market cap , owing in part to the backing of many prominent figures in the cryptocurrency community and many popular exchanges. Bitcoin cash allows blocks of 8 megabytes and did not adopt the SegWit protocol.
The creators of this hard fork aimed to restore the mining functionality with basic graphics processing units GPU , as they felt that mining had become too specialized in terms of equipment and hardware required. One unique feature of the Bitcoin gold hard fork was a "post-mine," a process by which the development team mined , coins after the fork had taken place.
Many of these coins were placed into a special "endowment," and developers have indicated that this endowment will be used to grow and finance the bitcoin gold ecosystem, with a portion of those coins being set aside as payment for developers as well. Generally, bitcoin gold adheres to many of the basic principles of bitcoin. However, it differs in terms of the proof-of-work algorithm it requires of miners.
When SegWit was implemented in August , developers planned on a second component to the protocol upgrade. This addition, known as SegWit2x , would trigger a hard fork stipulating a block size of 2 megabytes.
SegWit2x was slated to take place as a hard fork in November However, a number of companies and individuals in the bitcoin community that had originally backed the SegWit protocol decided to back out of the hard fork in the second component.
Some of the backlashes was a result of SegWit2x including opt-in rather than mandatory replay protection; this would have had a major impact on the types of transactions that the new fork would have accepted. In only a few short years, bitcoin has already spawned a large number of forks. While no one can say for sure, it's likely that the cryptocurrency will continue to experience both soft and hard forks into the future as well, continually growing the cryptocurrency community while also making it increasingly complicated.
Your Money. Personal Finance. Your Practice. Popular Courses. Bitcoin Guide to Bitcoin. Cryptocurrency Bitcoin. Table of Contents Expand. Genesis Block. Bitcoin XT. Bitcoin Classic. In some cases, however, software changes are so important that they require everybody to update their client at the same time in order for the network to continue to function. When a fork occurs, the temporary or permanent creation of a parallel blockchain is implemented.
The new chain uses the new software, the old chain uses the legacy software. There are two types of forks. When a hard fork is implemented, the new, updated version of the software will reject all transactions from the legacy version of the software. This can be viewed as backwards incompatibility.
Making a transaction on the legacy software would reflect in the new software. The transactions that occur on the new software, however, are not understood by the old software. Bitcoin XT is generally regarded as the first divisive fork in Bitcoin history. It should be noted that both Hearn and Andersen have played major roles in the historical development of Bitcoin over the duration of its lifetime.
The Bitcoin XT fork was proposed in order to reach 24 transactions per second on the Bitcoin network by increasing the total block size to 8 MB. The Bitcoin XT fork was well-received upon first launch, and was run by over 1, nodes at the time of implementation in August Over the course of time, however, Bitcoin XT has suffered a sharp decline.
While Bitcoin XT had more than 1, nodes at the time of launch, the project was essentially dead by early Today, there are less than 30 Bitcoin XT nodes running. After the failure of Bitcoin XT, there was still a strong desire in the Bitcoin community to increase block size and thus speed up transactions.
Some developers created the Bitcoin Classic fork in February Bitcoin Classic aimed to increase block size to a moderate 2 MB. Around eight months after launch, the Bitcoin Classic fork changed direction and aimed for a market-driven blocksize. Bitcoin Classic is currently run by around nodes, compared to the 2, or so nodes it boasted in The Bitcoin Classic project still exists, and has now adopted a long-term development strategy over the next 5 years.
Bitcoin Unlimited is still relatively popular, and currently boasts around nodes at the time of this report. The Bitcoin Unlimited fork has a unique strategy. A number of companies such as ViaBitcoin have offered a range of solutions that are intended to create a fork mechanism.
Bitcoin Unlimited has suffered from some serious reliability issues. Bitcoin Unlimited is unique, as no coins can actually be purchased yet. Popular exchange platform Bitfinex has created Bitcoin Unlimited futures, which can be purchased and traded.
Each Bitcoin transaction is composed of a number of different elements, which includes a signature. Peter Wuille. SegWit also offers other advantages, such as a fix to transaction malleability, which is an old Bitcoin bug. These advantages are important as they facilitate the development of second-layer applications such as Atomic Swaps or the Lightning Network.