More than a hundred times, BTC has been tried to transform into a new entity. What came of it, and do these altcoins have any value now?
Bitcoin appeared in 2009. The first block in the cryptocurrency network was generated on January 3, and this was the birth of the crypto industry. Since then, according to Coinmarketcap, over 5,300 different digital coins have appeared, which are traded on more than 21,000 trading platforms.
As cryptocurrencies spread, more and more users began to appear in bitcoin, and this revealed one of its problems – scalability. The coin network can, on average, carry out 4 to 7 transactions per second. In other words, she is not ready for heavy loads. For comparison, the VISA payment system has a similar indicator – 24 thousand.
To address the scalability issue in 2014, two Bitcoin Core developers Gavin Andresen and Mike Hearn began work on an alternate version of the first cryptocurrency chain. They wanted to increase the maximum block size from 1MB to 8MB. This should have improved the throughput of the BTC network to 24 transactions per second.
The project was completed by August of the following year. Thus, a soft fork (without the creation of new coins) Bitcoin XT appeared. However, for the transition to the new network, it was necessary that at least 75% of miners support it.
At first, Bitcoin XT enjoyed some popularity. But later, its developers were criticized by the community and large Chinese mining pools for "violating the original principles of bitcoin and actions that could lead to its split." As a result, less than 1% of the community supported the soft fork, and by 2016 it was practically dead.
Gavin Andresen didn't give up. He, already in company with another developer Jeff Garzik, began to work on a new version of Bitcoin Core. It was supposed to increase the block size gradually, first up to 2 mb, and after 2 years – up to 4 mb.
The soft fork was launched in January 2016 and was named Bitcoin Classic. Initially, he was supported by several influential representatives of the crypto industry, for example, the exchanges Coinbase, Bitstamp and OKCoin, as well as the mining pools Antpool, BW.COM, HAOBTC.com and others.
However, immediately after the launch, Bitcoin Classic also began to lose its audience. This led to the fact that in November, the representative of the soft fork Tom Zander wrote on the official website of the project about its closure and urged miners to switch to Bitcoin Cash.
In May of the same year, another Bitcoin Unlimited soft fork appeared. Since the choice of the block size has already caused a conflict in the community several times, the developers of this version of the chain decided to abandon such restrictions. The market was asked to independently choose the block size by voting.
But this soft fork also failed. There were “bugs” in the Bitcoin Unlimited code that allowed attackers to carry out a DDoS attack, and in April 2017, more than 70% of nodes went down due to memory leaks.
Indirectly, work on the first hard fork of the main digital coin began in 2015. Then developer Peter Woolle introduced the SegregatedWitness (SegWit) initiative. The idea of a soft fork was not about block sizes, but was aimed at changing the way transactions were recorded. It was supposed to remove them from the existing chain and transfer them to a different data structure. This proposal was supported by 95% of miners, and on August 24, the new version of the network was activated.
However, a few weeks earlier, former Facebook engineer Amory Sechet, who led one of the project's development teams, came up with another proposal. He again raised the issue of expanding the block to 8 MB and opposed Wulle's initiative.
Implementing changes to the bitcoin chain also required support from 95% of the community. However, the development team did not wait for the miners' approval and carried out an unplanned hard fork. Thus, the altcoin Bitcoin Cash was born on August 1, 2017. The project was supported by many major players, including the then current CEO of the Bitcoin.com portal Roger Vera and the ViaBTC mining pool.
After the hard fork, each bitcoin holder received an equivalent amount of Bitcoin Cash coins. In the new cryptocurrency network, the maximum block size has been increased from 1 MB to 8 MB. Thanks to this, she became capable of conducting up to 61 transactions per second.
The Bitcoin Cash ecosystem also has a new feature. Since the first cryptocurrency and its hard fork are based on the same SHA-256 algorithm, miners have the ability to switch between coins depending on which one is more profitable to mine.
On November 15, 2018, the Bitcoin Cash network experienced its own hard fork. As a result, it split into two new chains Bitcoin ABC (now BitcoinCash) and Bitcoin SV.
Bitcoin Gold & Co.
At the end of 2017, when the rate of the first cryptocurrency approached its all-time high of $ 20,000, there was a surge in hard forks. The first of these split from the main BTC network in November and was named Bitcoin Gold. Bitcoin holders also received an equivalent number of new coins, and their total supply remained at 21 million.
The project aimed to reduce the influence of industrial miners. To do this, the developers implemented the ability to mine a coin using video cards and at the same time remain competitive (then special equipment became necessary for mining bitcoin, since video cards could no longer cope with the computing function).
However, the launch of the Bitcoin Gold network was unsuccessful. On November 12, immediately after the coin was added to the exchanges, its price fell from $ 400 to $ 130-140. In this regard, one of the main mining pools closed 3 days after opening, and the head of the MinerTopia mining pool called the mining of the fork "a waste of time and resources."
In December 2017, the price of Bitcoin Gold, amid a rally across the entire crypto market, briefly rose to $ 450. To date, it has dropped to $ 9, which is 97% below the all-time high. A 51% attack on the fork's network in May 2018 contributed to the destruction of the fork's reputation.
At the end of November, another hard fork was formed with similar functionality to Bitcoin Diamond. And in December – 20.9 more branches were added in the first months of 2018, such as Bitcoin Pizza, Super Bitcoin, Bitcoin God, Bitcoin Candy and many others.
In total, according to the forkdrop.io service, bitcoin had 105 hard and soft forks. 45 of them are still operational. 31 projects were abandoned, the coins do not have a functional blockchain. The remaining 29 cryptocurrencies are in development.
10 bitcoin hard forks are among the top 1000 cryptocurrencies in terms of capitalization. The 5th and 6th lines are occupied by Bitcoin Cash and Bitcoin SV, Bitcoin Gold is at 37th position, Bitcoin Diamond – at 51st.