Bitcoin Forks: What You Need to Know
Bitcoin Cash (BCH) is the main and most famous Bitcoin fork. The split occurred on August 1, 2017. The reason was the disagreement within a small part of the Bitcoin community. The community decided to implement the SegWit2x protocol and increase the block size to 2 megabytes. They agreed to leave the algorithms unchanged but increase the block size to 8 megabytes. This solved the Bitcoin scalability problem, which is about BTC not being capable of processing more than 7 transactions per second. In comparison, BCH can process 61 transactions per second. In addition to transaction processing speed, the cost of the commission has also been significantly reduced.
The last common block was generated under the number 478558, then the chain split. All BTC holders who wished to move to the new system received the same balance in BCH. As of April 2021, it is the largest Bitcoin fork. Bitcoin Cash has a total capitalization of around $11 billion and a value per token of $550.
Interestingly, this is the only fork that has also had a fork – Bitcoin Satoshi Vision (BSV) emerged in November 2018. BSV is currently trading at $250 and has a total capitalization of $5 billion.
Almost following BCH with the main Bitcoin chain, another fork occurred. The new coin was called Bitcoin Gold (BTG). This time, the purpose of the fork was to increase decentralization, since at that time, most of the network’s computing power was controlled by huge mining pools concentrated in China. To this end, the mining algorithm was refined so that both owners of specialized ASIC devices and owners of regular graphics processing units (GPUs) could participate in the process.
The fork took place on October 24, 2017 at block height 491407. In 2018 and 2020, the network suffered a 51% attack, but the developers managed to fix the vulnerabilities both times and kept BTG afloat. Today, Bitcoin Gold has a total capitalization of around $750 million and trades on exchanges at about $40 per unit.
Another fork of the original Bitcoin took place on November 24, 2017 at block height 495866. It was called Bitcoin Diamond (BCD). The goal of this fork was to improve privacy and lower transaction costs. The SHA-256 algorithm was used for this purpose, and the total supply was increased tenfold. The block size was also increased to 8 megabytes to process more transactions.
Nowadays, the total capitalization of BCD is about $240 million and it trades around $1 per unit.
More Bitcoin Forks and Clones
There are other forks and clones of Bitcoin represented on the exchange. All of them were supposed to improve the original brainchild of Satoshi Nakamoto. However, in practice, those improvements were not appreciated by users. This can be seen in the modest gains of most Bitcoin forks and clones.
Some are slightly more popular and even have some capitalization (Bitcoin Atom, Bitcoin Interest, Bitcoin Private, Lightning Bitcoin, etc.). Others have no capitalization at all and are traded on exchanges at rock-bottom prices:
- United Bitcoin
- Super Bitcoin
- Bitcoin God
- MicroBitcoin, etc.
Even more forks and clones have completely fallen out of use, failing to prove any value for users.
Not a Bitcoin Fork
There is an opinion that Litecoin is a fork of Bitcoin. It is a misconception.
The fact that Litecoin was initially based on the same technologies as Bitcoin does not make it a fork. Litecoin is an independent cryptocurrency with the original blockchain, while a fork is an offshoot in the Bitcoin blockchain. The same misconception often applies to other blockchain projects based on Bitcoin technologies, including Namecoin, Primecoin, etc.