Lately, I’ve been interested in Bitcoin and was wondering can anyone fork Bitcoin? Also, what is a fork and why does it take place?
Anyone can fork Bitcoin, but implementing it takes a large group of people. Not everyone agrees on change and this is why there is a fork.
What is a Fork?
In August 2017 the first Bitcoin fork created Bitcoin Cash. Then a few other forks created Bitcoin Gold, Bitcoin Diamond, and Litecoin.
A fork is a change to the Bitcoin code almost like a changing of the rules. Like most things in life, not everyone is going to agree to the change and this is why there is a fork.
Reminds me of the Joke
It’s difficult for a group of people to agree on anything.
A fork creates 2 coins the older version and a newer version. One of the visions of Bitcoin was that it was going to be a global currency.
People could use it to help purchase products no matter what country they were in.
The problem with Bitcoin was that it was starting to become like Gold. People were just parking their Bitcoin and not using it as a currency.
There is also concern with using Bitcoin due to the volatility of the price.
Also as the Bitcoin blockchain expanded the transactions got slower and slower.
It can take seconds to 60 minutes and sometimes longer to transfer a Bitcoin to someone else. These are a few of the reasons why Bitcoin forked the first time to Bitcoin Gold.
Bitcoin has continued to fork many more times as groups of people tried to create a better version.
There are also 2 different kinds of forks, hard forks, and soft forks.
Hard forks are when a change takes place that isn’t compatible with the older versions. A hard fork leads to a new coin being created and a new blockchain.
A soft fork is a change in the blockchain that is backward compatible. This means that non-updated nodes are still able to process transactions.
A node is 1 block and a blockchain is made up of many of these nodes. It’s a decentralized network, so there isn’t 1 node or thing that controls everything.
There are also 2 different kinds of soft forks.
Miner activated soft forks (MASF) this means the new rules are accepted when the majority of miners agree to the update.
User activated soft fork (UASF) is when an update happens without the miner’s support.
You might be wondering how many times has Bitcoin been forked? One estimate is that there are around 105 Bitcoin forks.
A few examples would be…
- Bitcoin Cash
- Bitcoin Gold
- Bitcoin Atom
- Super Bitcoin
- Bitcoin God
What is cool about a fork is if you own a Bitcoin and a fork happens you can get a free coin. Yea, you keep 1 Bitcoin and get the new coin. You just have to claim your new coins.
If you want to know how to claim a coin after a fork you can click on this link HERE.
How to Fork Bitcoin
Anyone can fork Bitcoin by going to Github/bitcoin. Then you can click on the fork button and change the name of the coin and description.
All Github is a code hosting platform that allows someone to collaborate with other coders on a project. It’s open-source and this means everyone can see the code and the project.
Just because you fork Bitcoin in Github.com that doesn’t mean your new coin is going to take off. You still need a lot of the community to agree that a fork is needed.
For a hard fork to take place a majority of the miners need to support it (think above 51%). A soft fork also needs a majority of miners to upgrade to enforce the new rules.
A great example of this would be Bitcoin Cash. A large mining pool called ViaBTC, which is located in China wanted the fork.
The group of miners in China has a lot of hash power with the blockchain. Hash power is the rate at which to complete the calculations each second to mine the Bitcoin.
In conclusion, to fork Bitcoin successfully you need above 51% of the miners to support it.
Bitcoin has forked many times and will continue to fork into the future. Apart from Bitcoin Gold that is a popular cryptocurrency, another popular one is Lite Coin.
What is Lite Coin?
Lite coin was created by Charlie Lee who is a former Google employee. The main difference between the 2 is the speed.
Yes, the biggest complaint with Bitcoin is that it’s “slow.” This is why Bitcoin Cash was created and Litecoin. Both are forks from Bitcoin.
Another benefit to Litecoin is that the fee per transaction is “much” less at around .00022 cents. Bitcoin is around 0.25 cents to 0.68 cents.
Both of these amounts can change based on congestion on the network. Also, both have central mining operations. A central mining operation is a giant business that mines all the coins.
A decentralized mining operation means many different people are mining the coins.
Lastly, Bitcoin has a more secure network than Litecoin.
Another popular fork was Bitcoin Gold. The idea behind Bitcoin was that it was to be a decentralized network.
No single organization or central authority would control it. In the early days of Bitcoin mining, anyone with a computer could mine some Bitcoin.
Now, that doesn’t exist. You need to be a part of a mining pool or a group of miners that have “powerful” computers to mine it.
The problem is mining pools have lots of power and control of the network. If you want a fork to happen you probably have to talk to a mining pool.
There probably is a “big” chief of the mining pool so he is the central authority.
In response to these mining pools with “all”, the power Bitcoin Gold was created. This is a new mining process that enables the little guy to have a shot at mining cryptocurrency.
Bitcoin Gold also limits its supply to a maximum of 21 million. Also, many people complain of the speed of a Bitcoin transaction so Bitcoin Gold can process a transaction in 2.5 minutes compared to 10 to 60 minutes of Bitcoin.
The bad news is that in May 1018 a hostile takeover over Bitcoin Gold took place. This is when a group was able to control 51% of the blockchain hashing power and made big changes to the network.
The strange part of the attack was that the purpose of the currency was to prevent central control over the blockchain. Looks like it failed, but the effort was noble.
Another popular fork with Bitcoin created Bitcoin Diamon in 2017. Bitcoin Diamond was created when Bitcoin miners “Team Every” and Team 007” were dissatisfied with how Bitcoin was growing.
They wanted faster transactions that were more affordable. Also, they wanted it accessible for new members. The goal was to have people in developed nations being able to transfer funds using the blockchain.
Bitcoin isn’t perfect and one issue is the block size is limited to 1 MB. This allows the platform to carry out 2 to 7 transactions a second.
Bitcoin Diamon increased the block size to 8 MB and this can prevent the blocks from pending transactions and it can deliver faster transaction times. Also, the transaction capacity of the blocks can provide 5 times the speed.
This means Bitcoin Diamond can deliver 100 transactions per second.
It also reduces the fees to less than a penny per transaction. Bitcoins transaction fees go from 22 cents a transaction to 1.129 Dollars a transaction.
The Future of Bitcoin?
The future of Bitcoin is unknown and exciting.
As the price rises and falls, some companies are jumping onto the cryptocurrency bandwagon. Also, some people are as well (Myself included).
A huge plus for the crypto industry was Paypal accepting cash for a few cryptocurrencies as an investment. You can’t transfer the crypto to another person, but you can buy and sell it. Paypal makes money each time you do.
Around 4 years ago I tried to get on the Kraken exchange and tried to get verified “many” times and I wasn’t able to.
It was “such” a pain in the ass I didn’t buy any Bitcoin (Now I’m kicking myself).
Having Paypal able to buy and sell cryptocurrencies is a big advantage to this movement. It makes it MUCH easier and this is great.
What I’m interested in is the competition for Bitcoin. Amazon.com could be working on a cryptocurrency as well as Paypal, Facebook, and others.
Everyone want’s to jump into the action and get a piece of the pie.
The other thing that concerns me about Bitcoin and Cryptocurrencies is regulations. Yes, some people think Bitcoin and crypto are mainstream, but it’s not yet.
It’s still “very” new and Janet Yellen the treasury secretary is concerned with crypto.
It is a growing problem with terrorism and drugs according to Janet Yellen. You can view more about her comments by clicking the link HERE.
The only thing I know is it’s going to be exciting. There are going to be more ups and downs and it is fun to learn about and watch.
If you want to discover all the passive income ideas you can do with Bitcoin you can check out this post HERE.
I hope this blog post on can anyone fork Bitcoin was helpful to you, have a nice day.