- Mike Hearn launched Bitcoin XT, the first notable Bitcoin copy, in 2014 to implement several new changes.
- A bitcoin hard fork is a parrel bitcoin blockchain network that has undergone a drastic change in protocol.
- The primary purpose of Bitcoin XT was to increase the transaction speed from seven transactions per second to 24 transactions per second.
Bitcoin has transformed the world by ushering in the concept of Web3. Within less than two decades, blockchain developers have found a new way to re-use its fundamental functionality; blockchain. Although what many might now know is that throughout the years, there have been various “Bitcoin copies” that have each steadily contributed to the construction of Bitcoin’s sophisticated decentralized network known today. This article will tackle one of the main questions asked in Web3; what are hard and soft forks?
In addition, we will tell the story behind the development of Bitcoin by telling the story of how the different types of Bitcoin forks each played a significant role in the development of what is known as the currency of the future.
Understanding the fundamentals behind a Bitcoin copy
It is common to hear many crypto traders within Africa refer to various altcoins such as Ethereum or Cardano as Bitcoin Copies, but it’s far from the truth. In hindsight, Bitcoin is considered the original cryptocurrency, but the only similarity it shares with other altcoins is the fundamental that makes them cryptocurrency; blockchain technology. However, the term Bitcoin Coopies stems from various variations of Bitcoin that are either similar or entirely different, but each belongs within the same blockchain network. The term more commonly used is blockchain fork.
The original Bitcoin blockchain network was the first iteration of a decentralized nature, which meant that any alterations to the network required consensus among its participants. Unfortunately, since Bitcoin presented a new concept, competition was bound to erupt, and with the likes of Mastercoin and Ethereum, Bitcoin’s decentralized nature had to improve.
This meant that the network had to undergo several changes, and it required the support of most users. In layman’s language, a blockchain fork alters Bitcoin’s decentralized network protocol. Due to its immutability and smart contract mechanism, any alteration resulted in two extremes. It either caused the radical change that altered the entire network entirely or a minor change that still set it apart from the original blockchain network.
The concept of forks was necessary since it was the only way to upgrade bitcoin’s blockchain network without building a new one from scratch.
There are two significant types of blockchain forks;
- Hard forks
- Soft Forks
According to Moore’s law, technology will advance every two years, and this law has formed the baseline of most developed technology, ensuring that an improved version is underway. As the concept of Bitcoin’s decentralized network soon gained much fame and attention, various blockchain developers took Satoshi’s initial idea and redefined it.
This created new tokens that had better, faster and different functionalities from Bitcon’s blockchain network. To improve, Bitcoin underwent a process called forking. Unfortunately, in some scenarios, the outcome led to the development of an entirely new type of Bitcoin fork.
A bitcoin hard fork is a parrel bitcoin blockchain network that has undergone a drastic change in protocol. This led to the creation of two Bitcoin Copies that were incompatible with Btcoin’s original blockchain network.
This first led to a significant problem since nodes from the original blockchain would reject the newly added blocks. Likewise, the newer blockchain will run under new guidelines or slightly different but significant changes. Thus it will also deny any node running on the old blockchain network. This led to the term “backward incompatibility”.
This mainly occurred with the network trying to advance too quickly or when a dispute among members occurred, The latter occurred more often because for an update occurs, only a majority was needed. This meant that a substantial amount of Bitcoin’s network was against this notion.
Accidental Hard forks
In addition, there is also a term known as Accidental Hard forks, and developers created several Bitcoin Copies through this process. An accidental hard fork occurs when two miners find and use the same block simultaneously, and Bitcoin’s decentralized network issues a consensus, and both will receive the notification simultaneously.
As a result, both parties will keep mining on different chains before another miner adds a subsequent block. Since the process will involve miners adding blocks to the chain, the smart contracts select only one and discard the other. As a result of each chain functioning with different rules, the system will pick the longer chain. The miner who worked on the abandoned block will eventually lose.
Soft fork still adopts the principle of altering Bitcoin’s blockchain network; the difference comes from the required alteration. A soft fork is also known as a forward-compatible.
This means that both the old and new blockchain networks can continue to co-exist in the same virtual space, and thus the old can easily send a block to the new blockchain and vice-versa. In layman’s language, a soft fork can convince the old blockchain network to accept the new rules without altering its original functionality.
A soft fork is more efficient and cost-friendly since both transactions can co-exist.
Difference between a hard fork and a soft fork.
A decentralized network potentially means that there will be two opposing sides. The Web3 community then argued which approach was better, but complex and soft forks are helpful depending on the circumstances.
Soft forks are more efficient, milder and more accessible to implement than hard forks. Unfortunately, this poses a severe risk threat to Bitcin’s blockchain network. Since the new and old networks interact, there is a huge security risk. If perpetrators access one network, they will easily access the other. For some time now, a Bitcoin copy that is soft forks has developed various measures to mitigate this flaw.
The hard fork provides efficiency and flexibility for the developer. As competition rises, the need for improvement is necessary. Fortunately, when creating a hard fork, a developer has creative freedom. If an idea or a concept fails, the developer can discard the new blockchain network without potentially harming the original.
Bitcoin Copies that revolutionized blockchain technology.
Throughout Bitcon’s lifespan, changes were necessary to improve its efficiency and security. There are 105 types of Bitcoin Forks in total. Of those, only 74 are considered active projects relevant to Bitcoin holders. The remaining 31 are historical relics which we will highlight to showcase how many Bitcoin Copies were the building block of Bitcoin’s dominating nature.
Bitcoin XT is the first notable Bitcoin Copy and fork to exist. Mike Hearn launched this type of Bitcoin fork in 2014 to implement several new changes. Unfortunately, he intended to improve Bitcoin’s original blockchain network at the time. Unfortunately, the difference was too drastic, creating the first hard fork in Web3.
The primary purpose of this hard fork was to increase the transaction speed from seven transactions per second to 24 transactions per second. To accomplish this feat, Mike proposed that Bitcoin’s decentralized nature had to increase the size of blocks from one megabyte to eight megabytes.
During its premiere, the new and improved Bitcoin Copy awed the masses and had more than 1000 nodes running the software. Remember that 1000 was a heft number back then because many still saw digital assets as scams. Unfortunately, users lost interest at the end of 2015 and abandoned the project. Mike shut down Bitcoin XT, but it proved the concept of forking.
When Bitcoin XT declined due to several issues, the community saw an opportunity for even faster transaction speed. As a result, most crypt traders were eager for the following type of Bitcoin Fork. This led to the creation of Bitcoin Classic several months after its predecessor shut down. One of the few problems Bitcoin XT presented was a slow and limited network due to the size of the blocks. To mitigate this problem, developers designed Bitcoin Classic with only 2MB blocks.
Eager crypto traders quickly adopted the improved type of Bitcoin fork and ran about 2000 nodes. Fortunately, the project is still alive and marked a significant point in Bitcoin’s decentralized network.
SegWit was an earlier type of Bitcoin fork, just like BitcoinXT. However, Pieter Wuille, its founder, decided to take a different route than its counterpart Bitcoin XT. Wuille believed that the solution to increasing the speed of a Bitcoin Copy was by decreasing block size. According to his thesis, the smaller the block size, the less congested and slow Bitcoin’s network will become.
SegWit was the first soft fork that also aimed at improving the security of Bitcoin. According to its report, this was possible by increasing the rate of transaction speed. By doing this, rogue nodes would no longer be able to change transaction details.
Also, Read Consensus Mechanisms in the blockchain world and their importance.
As developers continued to tinker with SegWit, some decided to initiate a hard fork o its original protocol. Doing this led to the creation of Bitcoin Cash which split off from Bitoin’s decentralized network in 2017.
Due to the advanced mechanisms acquired from its predecessors, Bitcoin cash became the most successful hard fork in Web3. In June, Bitcoin Cash became the 11th largest altcoin by market cap. Unfortunately, users later improved Bitcoin Cash and adopted the BitcoinXT mechanism rather than SegWit. It moved from 1 Mb block size to 8MB and 32 MB. This proved to be a valuable upgrade.
As its success grew, blockchain developers would later create more hard forks from Bitcoin Cash. They would split it into:
Many crypto traders consider Bitcoin Gold an improved version of Bitcoin with an original touch. The creators of this type of Bitcoin fork wanted to restore the mining functionality with a basic graphic processing unit. This was in response to the various woes of crypto miners who claimed that the activity soon became too focused on equipment and hardware requirements.
To accomplish this creator added a unique feature to this Bitcoin Copy called pre-mine. It is a process in which the developers mind 100,00 coins after the hard fork development. These coins are in special endowments, and developers indicated that they would later grow to finance the bitcoin gold ecosystem. It’s choice to bring back the essential elements led to the organization adopting the PoW mechanism.
With Bitcoin’s blockchain network steadily increasing in value, many had concerns about poor privacy measures. To address this issue, creators developed Bitcoin Diamond. It would be a Bitcoin Copy that would focus solely on privacy and slow transaction confirmations—given a rapidly growing scale of Web3 developers made 210 million BCD, ten times that of BTC.
To balance its value with the crypto’s high volatility, they changed its exchange rate to 1:10. This means that 1 Bitcoin equals 10 BCD.
This move ensured that the lower cost of the transaction would attract more users to Bitcoin’s blockchain network. They also added various encryption mechanisms securing each transaction, providing enhanced privacy.
Each of these types of Bitcoin fork had a significant role t play in ensuring the prosperity of its original fork. The failures and successes have led to the rapid improvement of Bitcoin’s decentralized network. Today there are multiple soft forks which continue to increase Bitcion’s efficiency. As for the Bitcoin Hjard forks, they provided adequate testing grounds for new ideas.