Bitcoin has taken the world by storm and since sparked many innovations in the world of cryptocurrency. Although there is only one bitcoin, there are now several imitators that can be found on a Bitcoin Exchange as well. Cryptocurrencies like Bitcoin Cash and Bitcoin Gold are versions of bitcoin with slight modifications of the code.
Some suggest the reasoning behind this is to use bitcoin’s reputation to get an added advantage over new cryptocurrencies. While others recognize new versions of bitcoin are born from technical disagreements in the protocol’s rules. Before we answer why there are so many versions of bitcoin, let’s backtrack to take a closer look at the bitcoin protocol.
The bitcoin protocol
The bitcoin protocol includes consensus rules that dictate the bitcoin network characteristics, such as the block size, total supply, mining, etc. The majority of the nodes must agree on these rules when running bitcoin software. If the minority feels passionate about a change in the protocol and the rest of the network does not agree, they will need to replicate and modify the software to create a new form of bitcoin. Some of the debates have included factors like block size. On one side, bitcoin users have argued that the current block size isn’t large enough to meet the demands of today’s market. They believe that by increasing the size of the block and altering the underlying code, the transaction speeds will increase. The argument is often met with the traditionalist viewpoint, that the block size was created for a reason and should not be changed. Check out details here bitcoinevolution.co
When bitcoin produces variations, the bitcoin blockchain undergoes a process known as forking. The blockchain divides itself into two entities in the forking process, which has occurred many times since Satoshi Nakamoto first created it. Forking is popular since coding a new blockchain is difficult. Those who hold the forked cryptocurrency also receive an equivalent amount of the new currency since the ledger is a copy of the base code. However, many of these projects didn’t gain traction and have since fallen into oblivion. When a hard fork occurs, users upgrade their software. The new software will go on to reject transactions from any older software, creating a new branch (or fork) in the blockchain. For a little bit of history, the first notable hard fork was Mike Hearn’s creation, Bitcoin XT.
Some bitcoin forks you might not even know you have been holding, such as Litecoin and Dogecoin, since they rebranded their names to avoid advertising their bitcoin roots.
Many of these bitcoin versions stemmed from improvements over bitcoin. However, looking just a little bit deeper will reveal that these clones compromise the integrity of the cryptocurrencies. Some of the versions in existence include:
Creators designed Bitcoin Cash with larger blocks and less decentralization. As a result, miners have more control over the network. Although they created this version to reduce transaction time, Bitcoin Cash has a reputation for being 40 times slower.
When another version, Bitcoin Private, was created, someone took advantage of its private nature to create extra tokens and drive the supply beyond the 21 million thresholds. The intention was to combine the privacy feature of the Zclassic cryptocurrency with the popularity of bitcoin. Cryptocurrency exchanges like HitBTC have since delisted this hard fork.
Bitcoin Gold is one of the top-valued coins, created to make mining easier for individuals. The creator aimed to restore the mining functionality with a basic graphic processing unit (GPU) since mining has since become more complicated involving specialized equipment. One of the most unique features in this iteration was a “pre-mining process” where the development team could mine 100,000 coins. The developers believed that these coins could be used in “endowment” to grow the new bitcoin gold ecosystem and pay the developers.
Many creators started these projects with good intentions. However, like everything, there are fraudulent parties to consider. Due to its popularity, the bitcoin label has also become popular for scam-coins. Bitcoin Platinum was one of the most well-known. A teenager in South Korea created this coin to profit off the bitcoin market.
There are so many versions of bitcoin since the concept is still new and evolving. With no right or best way of doing things, many people have new ideas to improve the way bitcoin works. Forking also allows creators to position themselves as the creators of the next bitcoin advancement. If the fork were ever to surpass the bitcoin network in terms of transaction volume, they could be recognized as the makers of the most popular cryptocurrency on the market. So, why not try to steal some of the fame from the unknown Satoshi Nakamoto?