History of Bitcoin Forks: Every Major Version of Bitcoin, Explained

Despite being the most popular cryptocurrency on the planet, Bitcoin (BTC) harbors several limitations and drawbacks that developers have tried to address numerous times over the years. 

The best way to do so is to introduce a fork and take the network in an alternate direction. 

However, although there have been a staggering number of forks of Bitcoin over the years, only a handful have managed to make a mark on the industry for how ambitious and creative they were in practicality. 

What is a Hard Fork?

It’s worth defining what a hard fork actually is and why it is deployed. 

A hard fork describes when a blockchain separates into two different paths. One path will see it remain as normal without any changes, while the second will carry over the basics while changing and tinkering with certain aspects and introducing new rules to make it an entirely different and unique network. 

So put simply, it’s a way for ambitious developers to create a new and improved version of the original without changing the original itself.

Forks tend to occur when developers and community members can’t agree on the direction of a project and are usually a go-to option when there are problems that some feel need to be solved as soon as possible. 

Many are aware that Bitcoin possesses its fair share of drawbacks due to its age, hence why it has spawned so many forks. 

How Many Bitcoin Forks Are There?

Though many more may exist that we are simply unaware of, over 100 Bitcoin forks are currently known to have existed. 

Not all of them managed to stick around, though. Over 90% of these forks are now long gone, whether it be because they were too ambitious or because they weren’t effectively addressing a problem and couldn’t garner enough attention from the public. 

Why Bitcoin Has Seen So Many Forks

Remember that the primary purpose of a fork is to rectify an issue hampering investors’ experience with a blockchain. 

Bitcoin was first proposed in 2009 and was essentially the foreground that other developers could copy and build on, but crypto and blockchain technology have become much more advanced since then. 

As so, there are a few specific issues that the forks have aimed to rectify. 

Proof of Work 

Proof of Work is Bitcoin’s consensus algorithm. It is a process of collecting and verifying transactions through ‘mining’, where miners can verify in exchange for a few extra tokens as compensation. 

However, while a good initial placeholder, Proof of Work has problems, mainly because it is energy intensive. Mining requires an enormous amount of electricity, and as a result, the annual usage is often equivalent to that of entire countries. 

Another prominent issue is anxieties about the network becoming centralized by talented miners, meaning only a handful could take over the verification process and ultimately run the entire blockchain. 

While this might not always be the main issue that a Bitcoin fork tries to resolve, Proof of Work has become a target on multiple occasions. 

Transaction Speed

When transactions enter the Bitcoin blockchain, they are placed into blocks that were initially limited to 1MB in size. This ‘block size’ was rather small by today’s standards, and as a result, it slowed down transaction speeds and could only handle roughly seven transactions per second. 

The issue of whether to increase block size has become a fierce debate among the Bitcoin community, leading to a plethora of forks dedicated to resolving this problem, which has been irritating BTC investors for many years. 

Fees

This is another issue related to Bitcoin’s small block size. Since Bitcoin’s blocks are small, yet the blockchain itself is so popular, it means an abundance of boxes need to be mined. 

Someone needs to pay these miners for the work, and this compensation will often take the form of transaction fees which can steadily climb up and dissuade people from wanting to use the network. 

Bitcoin wants to attract investors, not scare them away, so several forks have sought to minimize fees by altering block sizes. 

History of Bitcoin Forks

Now that we know the purpose of Bitcoin forks and their intent let’s explore specific examples. 

This won’t cover every Bitcoin fork, but instead, the ones that are often seen as being the most important in showing what Bitcoin could become and how forks could improve it going forward. 

Bitcoin XT

2015 was the year that the ‘block size debate’ between the crypto community and developers truly began, and it’s a controversy that continues to rage on even today. 

After much resistance to amending block sizes to bolster transaction speeds, a small team decided to create a hard fork instead, which would eventually become known as Bitcoin XT.

Bitcoin XT increased the size of the 1MB blocks to 8MB, and while it did attract some miners initially, it ultimately collapsed only a year after its introduction. The issue was that achieving 8MB block sizes was just too ambitious at that point in time, and it actually proved that those on the original network were right when they said that bumping up sizes this quickly just wouldn’t be feasible. 

Bitcoin Classic

The decline of Bitcoin XT didn’t stop the block size debate; in fact, it only inspired more forks to appear. 

This included Bitcoin Classic, a hard fork in which block sizes would be increased to 2MB. This was essentially a response to Bitcoin XT, which was clearly too aggressive, but adding just another megabyte to the blocks, allowing more transactions to be stored in each one, seemed far more realistic. 

This more considerate approach to resolving the block issue was originally met with much support, attracting almost 2000 nodes by 2016. Unfortunately though, Bitcoin Classic failed to garner enough community participation to even launch publicly, causing the community to wonder whether altering the blocks and creating a more efficient and modernized network was even possible at this point. 

Bitcoin Unlimited

Bitcoin Unlimited decided to take a slightly different route to resolving the issue. While increasing the blocks themselves was on the cards, Bitcoin Unlimited also wanted to give miners the flexibility to choose the size of each block that they verified. 

In this way, experienced miners with bulkier computer rigs could take on the bigger boxes, while beginners can focus on only 1 or 2 megabytes in size. 

There was still one problem, though. Many miners decided to remain on the blockchain network since the 1MB blocks were simply easier to mine, and in turn, earning new crypto was easier, too. 

As a result, Bitcoin Unlimited experienced a decline similar to that of its predecessors. Still, unlike them, it didn’t disappear completely, as the team behind it would move their efforts over to a new project: Bitcoin Cash (BCH).

Bitcoin Cash

Despite not reaching the heights of Bitcoin, the Bitcoin Cash fork has made genuinely impressive improvements to the original blockchain. 

In 2018, Bitcoin Cash introduced 32MB block sizes, which can handle up to 200 transactions per second, compared to Bitcoin’s 7 to 8. 

Additionally, Bitcoin Cash also deployed a difficulty adjustment system called aserti3-2D. Simply put, if a block lags behind schedule and is taking a while to process, or if no miners are picking it up, the difficulty for mining it will be lowered. This not only keeps miners happy, but also prevents the network from becoming congested and sluggish. 

Bigger blocks also mean that fewer need mining, which in turn makes the Proof of Work algorithm as a whole much cleaner and less energy-intensive. 

All in all, Bitcoin Cash seemed to have been the dream Bitcoin fork, and while it has experienced some success, the lack of investor confidence has meant it’s never been able to come close to rivaling Bitcoin in terms of popularity. 

Bitcoin Gold

Just a few months after the announcement of Bitcoin Cash in 2017, Bitcoin Gold appeared, but rather than emphasizing block size, it was more focused on modernizing the Proof of Work algorithm. 

Realizing that mining operations on Bitcoin were gradually becoming centralized by companies and advanced miners, Bitcoin Gold aimed to make it much more accessible for the community to participate in. 

To achieve this, Bitcoin Gold supported mining from basic GPUs, meaning that those who became miners didn’t need expensive rigs and multiple computers all hooked up to start verifying. 

This would incentivize miners who felt left out on the original network to jump ship over to this new, improved one. Additionally, since it would still be far less popular than Bitcoin, this could have resulted in a much faster and less expensive network overall.

However, after facing numerous 51% attacks in which cyberattackers controlled the network, Bitcoin Gold sadly lost much of its community due to safety concerns. 

Bitcoin SV

The SV in Bitcoin SV (BSV) stands for Satoshi’s Vision, referencing the fact that its founder, Craig Wright, claims to be the real Satoshi Nakamoto, the founder of Bitcoin. 

Though his claims have been heavily disputed, the purpose of this new blockchain was to create a network that steers more in line with what the author would have wanted. 

But what does this mean exactly? Essentially, Bitcoin SV strived to remove Bitcoin’s scalability issues by allowing blocks to be up to a staggering 2GB in size. It also fully supports Dapp functionality, which helps to make it more modern. It is also much greener due to fewer blocks needing to be mined. 

Bitcoin SV had every reason to be a success and is one of the only hard forks to amass a sizable audience of network participants. What’s prevented it from growing, though, is the controversy surrounding its founders and the lengths Craig Wright is willing to go to prove his Nakamoto claims. 

This has caused the BSV token to be removed from several major exchanges, driving people away from the network rather than drawing them in. 

The Soft Fork: Segwit 

Segwit is a little different from the other forks since it is defined as a soft fork rather than a hard one. This means that, rather than creating an entirely new network, Segwit is a backward-compatible change that essentially acts as an ‘upgraded’ model of the original Bitcoin network. 

The purpose of Segwit can be revealed from its full name: segregated witness. This means that the witness data of a Bitcoin transaction, which contains things like scripts and signatures, was removed almost entirely from the process. 

In turn, it allowed block sizes to be bumped up to 4MB, and since they were easier to mine with the witness data removed, it drastically improved the speed of the Bitcoin blockchain since its inception. 

This is one of the extremely rare instances of any fork having a positive impact on the Bitcoin network itself. 

Why Do So Many Bitcoin Forks Fail?

Reading all of this, you might be surprised that virtually every Bitcoin hard fork has failed to gain any significant level of success, but there are a few reasons why this is the case. 

• Bitcoin’s Value: Bitcoin is commonly known as ‘digital gold’ because many people buy large amounts of it hoping it will gain value over time. While this is obviously unpredictable, many investors already hold hope that Bitcoin will rise in value, making them less likely to move to other networks where prices will often be more volatile. 
• Decentralization: Being truly decentralized means it can be tricky to gather a general consensus on whether forks are worth it. Additionally, many of these hard forks have small teams that orchestrate them behind the scenes, while Bitcoin is designed to be entirely decentralized, involving the community a lot more. 
• Overly Ambitious: As seen with Bitcoin XT, hard forks tend to be too ambitious for their own good. After numerous failures, this makes people less likely to buy into all the promising new features and systems that are on offer. 

With that being said, there may be future hard forks that become the go-to Bitcoin standard, but it seems very unlikely given how attached many investors already are to the original network. 

On the Flipside

• Despite many of them failing to reach the heights of Bitcoin, hard forks could benefit Bitcoin.
• Hard forks don’t increase BTC inflation since their token would be completely separate, and more people cling to Bitcoin after other less-stable forks begin to decline.

Why This Matters

By uncovering Bitcoin’s forks, investors can gain a better idea of the network’s shortcomings and the numerous ways they could be resolved. This can also help generate ideas on viable ways to improve Bitcoin going forward, using these previous mistakes as reference points. 

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