Since its launch in 2009, Bitcoin has experienced several so-called hard forks. But, what exactly is a bitcoin hard fork? What’s a soft fork? What do they mean for the bitcoin blockchain and what is the outcome? Let’s find out…
A hard fork a change in the protocol of a blockchain that leads to a split and the creation of a whole new blockchain. Imagine your dinner fork with different prongs…each one being a blockchain. Got it? Good!
Hard forks happen when developers or miners cannot agree on the way that the software should be updated. Because of this, a section of them leave to create another blockchain – and a new digital currency.
What Is a Soft Fork?
Soft forks are general improvements to the functionality or security of a blockchain. If executed successfully, the updates are added while staying fully compatible with the original version – i.e. not creating a new blockchain but modifying the existing one.
Here are some of the most significant hard forks Bitcoin has experienced to date…
At the present moment, the Bitcoin Cash fork is by far the most successful example of a Bitcoin hard fork. It took place on August 1, 2017 when a group of bitcoin developers wanted to increase bitcoin’s block size limit, which divided the community.
Bitcoin Cash is able to processes transactions faster than Bitcoin as a direct result of this increased block size.
Bitcoin Cash has become the fourth largest cryptocurrency by market capitalization and is, therefore, one of the most popular cryptos in the world. So it is, of course, tradeable on the CoinMetro exchange. Sign up or log in to your CoinMetro account to experience trading this legend of hard forks!
The next bitcoin hard fork wasn’t too far behind Bitcoin Cash, occurring only a few months later. Bitcoin again hard-forked on November 12, 2017, giving birth to Bitcoin Gold. The hard-fork occurred in order to restore the functionality of mining with the most common Graphics Processing Units (GPU), replacing mining on specialized ASIC (customized chipsets), which was used to mine Bitcoin.
Characteristically, Bitcoin Gold is very similar to the original Bitcoin blockchain. It has not been as successful as its bigger brother Bitcoin Cash. It’s also garnered some negative press, following a 51% Attack in May 2018. As a result of this hack, the equivalent of at least $18 million was stolen from various crypto exchanges, and Bitcoin Gold’s market cap has drastically plummeted since then.
Just to show how far we’ve come, it’s not only the original Bitcoin that’s had a hard fork. We now have hard forks on top of hard forks!
On November 15, 2018 the Bitcoin Cash blockchain split between two implementations: Bitcoin ABC and Bitcoin SV. This one is a little trickier to follow, so we’ll write a dedicated blog post about this split on another date.
Keep your eyes peeled for more…
You’ve read about them, now trade them! Bitcoin and Bitcoin Cash are waiting for you on the CoinMetro platforms, right now. Trade with a reliable, EU licensed exchange on one of our three platforms, no matter what your level.
That’s all for today!
The CoinMetro Team