Bitcoin forks not only help to streamline services and create new niches, but they are also shaping the future of the coin itself.
Let’s start with a bit of a disclaimer: While it might make some sense to go in-depth about how bitcoin works, how it’s mined, what the blockchain is, and a million other little nuanced building blocks of how this particular crypto operates- we’ve kind of already done that. So if you’re having a few issues navigating this particular article, it might be helpful to take a quick gander at a few of our other articles that map out some of the more basic principles of bitcoin functionality.
This is largely because getting decent bitcoin information has become kin to trying to read a recipe off Pinterest. You first have to shift through a huge amount of information that you already know or have little to no interest in. So, we’ve cut out the appetizer and are headed straight to the entree- or rather the fork.
What is a Bitcoin Fork?
A bitcoin fork is quite literally a fork- but more of a “fork in the road” situation as opposed to dinnerware. As the digital currency evolves, so do its problems, solutions, and code structures. Each time there is a change in source code, the rules of how the bitcoin network works change ever so slightly. This is also known as a change to the bitcoin protocol.
These changes can be enacted for a number of reasons. Security updates, hoping to improve network speed or efficiency, or just to stay on top of the burgeoning technology that the market drives. Whatever the reason behind the change, the bitcoin community has to come to a consensus on whether or not the protocol should change, or how that change will occur. If the entire community agrees to a change in protocol, the code is adjusted and everything continues along the lines of the new protocol.
If the community can’t fully agree that the change should occur, sometimes the community will split into factions. Each faction will go their own way, either creating an entirely new community- one that adheres to the new protocol. Or sticking with the old system, and continuing along as they always have. Each of these circumstances happens fairly regularly in the bitcoin world, which is why if you’re a bitcoin user- forks are an important concept to understand.
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What Do Forks Do?
Briefly mentioned above, forks allow the bitcoin network functionality to keep up with user needs. Because the digital currency is decentralized- no one entity can decide what’s best for the group. So what happens once a decision is made? The factions, just spoken about, result in two types of forks: Hard forks and soft forks. Depending on which comes to pass designates what will happen to your preexisting bitcoin or the network you use.
Soft forks in the bitcoin protocol represent the faction that has gained consensus. When everyone on the network agrees that the change in protocol is merited and how to go about making that change. With soft forks, the protocol changes, but the users don’t. You can still participate in the network even if you’re using an older version of the protocol. This is because soft forks are backward compatible.
What backward compatibility means is that the new protocol can function alongside older versions. Like when the PlayStation2 came out, but the new system was still capable of playing old PlayStation 1 games. So updating the version of the bitcoin network offers users better functionality, it’s not required to continue using the network. Because of this backward capability, most soft forks to the network don’t get much press and integrate themselves seamlessly into the existing network.
Hard forks happen when consensus can’t be reached. At times, the forks that are being proposed offer such huge changes to the way the network functions, that many users can’t agree on which protocol is best. When this happens, the faction that accepts these changes branches off to create an entirely new system.
Some of the more notable hard forks of bitcoin are networks like BitcoinCash (BTC) and BitcoinGold (BTG). However, not all hard forks work out as well as those two, and the number of forks that exist along the bitcoin timeline might just take you by surprise.
How Many Forks Exist Currently?
BTC and BTG are fairly recognizable within the crypto community. So is SegWit, a soft fork that was recently implemented into the original bitcoin protocol in order to address security and scalability concerns. So you’ve probably heard of bitcoin forks, maybe even used them. But just how many forks exist?
Well, a whole lot more than three. As of April of this year, there were over a hundred different forks- both soft and hard- throughout bitcoin’s history. And most likely, there will be hundreds more in the future. This is because bitcoin, and realistically any crypto that’s got staying power, will need to adjust to market demands and evolve as technology does. The only way to do this within a decentralized system is by applying forks.
While some opponents of bitcoin say that the sheer number of protocol change makes the system weak. Think about your home computer operating system. From The behemoth, Macintosh computers with the grainy green and black screens have evolved over time to become the Apple of the tech world’s eye as sleek machines that are just as functional as they are visually stunning. Windows 10 is a far cry from MS-DOS. Even the most powerful names in technology evolve continuously to be able to keep on the edge and push the boundaries of their respective technological sectors- and bitcoin is no different.