The Ultimate Guide to Bitcoin Forks

The Ultimate Guide to Bitcoin Forks


Table of Contents

In early 2009, the mysterious cryptocurrency developer (or team of developers) working under the alias satoshi nakamoto launched the first software program that implemented the digital currency bitcoin. Since then, bitcoin has not only gained worldwide appeal, but has also inspired hundreds of other digital currencies.

Many of these cryptocurrencies use aspects that were already in Satoshi’s original program and concept.others take the bitcoin model and adapt or try to improve upon it. In some cases, bitcoin has generated several variations that are based on the same underlying concept and program, but are different from the original. In these situations, the bitcoin blockchain has undergone a process known as forking, through which the blockchain is split into two distinct entities.

It is through this forking process that several digital currencies with bitcoin-like names have evolved into bitcoin cash, bitcoin gold and others. For the casual cryptocurrency investor, it can be difficult to distinguish between these cryptocurrencies and map the various forks on a timeline.

What is a hard fork and a soft fork?

A hard fork and a soft fork, refer to two types of modifications known in the blockchain field. The term “fork” refers to a software update designed to be compatible or not with previous versions or not.

In the cryptocurrency and blockchain field, this represents the upgrade of a protocol or code. This upgrade creates a new version of the blockchain, letting two chains run simultaneously on different parts of the network.

  • Definition of a Soft Fork

A Soft Fork is the integration of new rules that do not make the old rules obsolete but rather backwards compatible. It does not need to have software and node updates.

Thus, the old nodes recognize that there has been a change. The update will have to be done with the different miners. The main reason for using it is to update functionality or to divide its community.

  • Definition of a Hard Fork

A Hard Fork refers to the various protocol changes, or software upgrades that make the old rules obsolete.

This is permanent and requires users and nodes to upgrade to the new version of the software or protocol. In this case, it becomes incompatible with its previous versions.

The opportunistic forks

Seeing the success of Bitcoin Cash in 2017, many “opportunistic” Bitcoin forks took place in 2017 and 2018. The first of these is Bitcoin Gold which was created on October 24, 2017. Unlike Bitcoin Cash and Bitcoin SV, Bitcoin Gold did not originate from an actual fork: it was a system that took over Bitcoin’s base code and ownership register at block 491,407.

Bitcoin Gold was presented as an ASIC-resistant branch of Bitcoin, with its mining being done by GPU. However, the reason for its creation was quite different, since its creators did not make the network public until November 12, three weeks later. Thus, they were able to take advantage of the interval to get more than 100,000 BTG, which at the time represented between 2 and 3 million dollars.

After Bitcoin Gold, a myriad of other minor forks appeared such as Bitcoin Diamond (November 2017), Super Bitcoin (December 2017) or Bitcoin Private (March 2018) etc…

How to get “Free Coins” from bitcoin forks

To get “free coins” from a bitcoin fork, you must have bitcoins on the platform conducting the fork to the block level where the fork occurs.

More importantly, the creator of the new fork takes a “snapshot” of the ledger at a certain block level and creates a copy of the chain (the result being the percentage of all coin holders in the chain who own the new fork coins). This copy becomes the new chain when the forked coin network becomes active.

Once the blockchain fork becomes active (which can take hours, days, weeks, or even months), you can claim fork coins.

The way you get these coins depends on the platform your bitcoins are on. If it’s a third-party platform that supports forking, your account will be funded within the time frame specified by that platform. If you manage your own private keys (for example, using a Bitcoin Hub wallet), you will need to have a wallet for the new currency and set it up yourself using the private key of your current Bitcoin wallet (i.e. all the bitcoins you were storing at the time of the forking). You need to have access to the address.

This is the essence of how to get a “forked coin” works. Getting a forked coin from another cryptocurrency is done in the same way as a bitcoin.

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