Bitcoin, the first cryptocurrency ever created, revolutionized the financial world with its decentralized, peer-to-peer system, but like any evolving technology, it has faced multiple updates and changes. These updates, which have led to the creation of new cryptocurrencies, are known as “forks.” Over time, Bitcoin has experienced numerous forks—some successful, others less so—each aimed at improving or modifying the original network.

Forks in cryptocurrency can happen for several reasons: technical upgrades, disagreements within the community, or the need to solve inherent problems in the protocol. This article delves into the key Bitcoin forks, what they are, why they happened, and their long-term impact on the cryptocurrency ecosystem.

What is a Bitcoin Fork?

A Bitcoin fork occurs when the blockchain—the distributed ledger that tracks Bitcoin transactions—splits into two. This happens when there is a change in the network protocol, either to introduce new features, resolve security issues, or improve scalability. The split can result in two types of forks: soft forks and hard forks.

• Soft Forks: These are backward-compatible updates. Nodes that don’t adopt the new changes can still interact with updated nodes, meaning the old and new versions can coexist within the network.
• Hard Forks: In contrast, hard forks result in a complete split of the blockchain. Nodes running the new version of the protocol will no longer communicate with those running the older version. This leads to the creation of a new cryptocurrency, separate from Bitcoin.

Over the years, Bitcoin has experienced several forks, both soft and hard, each with its own unique purpose and outcome. Let’s explore the most significant ones.

Top 10 Major Bitcoin Forks

1. Bitcoin Cash (BCH)

• Date of Fork: August 1, 2017
• Purpose: To improve Bitcoin’s scalability by increasing block size

Bitcoin Cash is undoubtedly one of the most famous Bitcoin hard forks. It was created after a long-standing debate within the Bitcoin community over how to solve Bitcoin’s scalability issues. Bitcoin’s block size was limited to 1 MB, meaning only a small number of transactions could be processed per block. As Bitcoin gained popularity, this limitation caused significant delays and high fees.

Bitcoin Cash increased the block size from 1 MB to 8 MB, allowing more transactions to be processed with each block, thereby reducing fees and transaction time. Bitcoin Cash positions itself as a “usable” currency, focusing on everyday transactions, whereas Bitcoin is often seen more as a store of value or “digital gold.”

Bitcoin Cash has its own active development and community and is considered one of the largest cryptocurrencies by market capitalization.

2. Bitcoin SV (BSV)

• Date of Fork: November 15, 2018
• Purpose: To restore the original Bitcoin protocol and emphasize scalability

Bitcoin SV (short for Satoshi Vision) emerged from a split within the Bitcoin Cash community. Craig Wright, a controversial figure who claims to be Satoshi Nakamoto (Bitcoin’s creator), and Calvin Ayre led a faction that believed Bitcoin Cash had strayed from Bitcoin’s original purpose.

Bitcoin SV increased the block size limit even further—to 128 MB—intending to allow more transactions per block and significantly reduce transaction costs. The BSV community emphasizes stability, security, and scalability as critical features of the protocol.

Despite its technical changes, Bitcoin SV is often polarizing due to its leadership and claims regarding its origins. Nevertheless, it continues to hold its own place in the cryptocurrency market.

3. Bitcoin Gold (BTG)

• Date of Fork: October 24, 2017
• Purpose: To decentralize mining and make it accessible to more people

One of the criticisms of Bitcoin is that mining has become centralized, dominated by large companies using specialized hardware known as ASICs (Application-Specific Integrated Circuits). Bitcoin Gold was created to level the playing field by allowing individuals with regular GPUs (Graphics Processing Units) to mine Bitcoin again.

Bitcoin Gold introduced an ASIC-resistant proof-of-work algorithm, making it difficult for those using ASICs to dominate the mining process. This change was intended to encourage broader participation in mining, ensuring a more decentralized network.

While Bitcoin Gold aimed to bring mining back to the masses, it has faced several security issues and controversies since its launch, including multiple attacks on its blockchain.

4. Bitcoin Diamond (BCD)

• Date of Fork: November 24, 2017
• Purpose: To improve transaction speed and privacy

Bitcoin Diamond was designed to solve two key problems: slow transactions and lack of privacy. BCD increased the block size to 8 MB and reduced the time required to mine each block. Additionally, it introduced encrypted balances and transaction amounts, giving users more privacy than Bitcoin’s transparent ledger allows.

Although Bitcoin Diamond had ambitious goals, it has not gained widespread adoption and is relatively obscure in comparison to other Bitcoin forks.

5. Bitcoin Private (BTCP)

• Date of Fork: March 3, 2018
• Purpose: To combine Bitcoin’s blockchain security with the privacy of ZClassic

Bitcoin Private is a unique fork in that it was created from a “fork-merge” between Bitcoin and ZClassic. ZClassic itself was a privacy-focused cryptocurrency derived from Zcash. Bitcoin Private aimed to bring the best of both worlds: Bitcoin’s decentralized structure and ZClassic’s enhanced privacy through the use of zk-SNARKs (zero-knowledge proofs).

Bitcoin Private provides users with the ability to shield transactions, offering more anonymity than Bitcoin’s transparent ledger. Despite this innovation, Bitcoin Private has struggled with adoption and has been involved in controversies, including accusations of developer fraud.

6. Bitcoin XT

• Date of Fork: August 2015
• Purpose: To increase Bitcoin’s block size to improve transaction throughput

Bitcoin XT was one of the earliest forks and was proposed by developer Mike Hearn. It aimed to increase the block size from 1 MB to 8 MB, allowing Bitcoin to handle more transactions per second.

Although it received some initial support, Bitcoin XT eventually failed to gain widespread adoption. The community remained divided over the block size debate, and Bitcoin XT’s relevance faded as other scaling solutions, such as SegWit and the Lightning Network, took center stage.

7. Bitcoin Classic

• Date of Fork: Early 2016
• Purpose: To address Bitcoin’s scalability by increasing block size

Like Bitcoin XT, Bitcoin Classic was created in response to Bitcoin’s scalability issues. It aimed for a more moderate increase in block size, proposing a jump from 1 MB to 2 MB. The idea was to gradually increase the block size to meet growing demand.

Although it gained support from some members of the community, Bitcoin Classic was eventually abandoned after the implementation of SegWit in Bitcoin’s core protocol. The community shifted focus to other solutions, and Classic became obsolete.

8. Bitcoin Unlimited

• Date of Fork: 2016
• Purpose: To let miners decide block size

Bitcoin Unlimited took a more decentralized approach by allowing miners to vote on the block size they wanted to use. The idea was that miners should have the freedom to decide the optimal block size for the network, believing that the market would naturally settle on the best configuration.

However, Bitcoin Unlimited faced significant challenges, including bugs and potential security vulnerabilities, and never gained traction. As with other early forks focused on block size, it became largely irrelevant as new solutions emerged.

9. SegWit (Segregated Witness)

• Date of Fork: August 23, 2017
• Purpose: To improve Bitcoin’s transaction capacity and lower fees

SegWit was a soft fork designed to optimize Bitcoin’s transaction capacity. It achieved this by changing how transaction data was stored, effectively increasing the number of transactions that could fit into each block without increasing the block size.

SegWit also fixed a bug known as transaction malleability and paved the way for second-layer solutions like the Lightning Network, which promises near-instant, low-cost transactions on the Bitcoin network. SegWit was a crucial upgrade, but it did not create a separate coin as it was compatible with the existing Bitcoin blockchain.

Also, read – Blockchain Forks: What They Are And Why They Matter

Minor Bitcoin Forks

In addition to the major forks listed above, numerous smaller Bitcoin forks have been created over the years. Some examples include:

• Bitcoin God (GOD): Aimed at charitable donations and community-driven development.
• Bitcoin Atom (BCA): Introduced atomic swaps to facilitate decentralized trading between cryptocurrencies.
• Bitcoin Interest (BCI): Offered interest-bearing accounts for Bitcoin holders.

These forks are far less well-known and have had minimal impact compared to major forks like Bitcoin Cash and Bitcoin SV.

The Impact of Bitcoin Forks

Bitcoin forks have played a pivotal role in the evolution of the cryptocurrency landscape. They allow for experimentation, new features, and sometimes the resolution of philosophical differences within the community. On one hand, forks can lead to innovation, as seen with Bitcoin Cash and SegWit. On the other hand, forks can also fragment the community, lead to confusion, and create duplicate versions of the original coin, which may undermine confidence in the ecosystem.

Should You Invest in Bitcoin Forks?

Bitcoin forks can be an intriguing investment opportunity, but they come with risks. While some forks, like Bitcoin Cash and Bitcoin SV, have maintained significant market value, others have faded into obscurity. The key to understanding forks is to research the problems they aim to solve and assess their potential for long-term success.

Investing in forks requires careful consideration of the project’s development, community support, and use cases. Forks that solve real-world problems and have active communities are more likely to succeed than those created for niche purposes or short-term gains.

Conclusion

Bitcoin forks represent the diverse and dynamic nature of the cryptocurrency world. From attempts to scale Bitcoin’s network to introducing privacy features, these forks showcase the constant innovation happening within the blockchain space. While some forks have been more successful than others, all of them have contributed to the broader understanding of how Bitcoin and blockchain technology can evolve.

As the cryptocurrency space continues to grow, new forks are likely to emerge, each bringing with them new ideas and possibilities. Understanding these forks is essential for anyone looking to navigate the ever-changing world of digital currencies.