An optimistic outlook on how Bitcoin Blockchain splits may actually help to advance the Cryptocurrency eco-system. Whereas to the general public this is a phrase most associated with motoring, to the cryptocurrency community, a hard fork represents something much more serious. Without going in any precise details, during a hard fork, the blockchain of a cryptocurrency splits to form two often competing forms of the currency.
It occurs when sets of stakeholders within a cryptocurrency normally miners and developers have a conflicting perspective on how it should develop. Bitcoin itself has had just the two major hard forks in recent years, with the inception of Bitcoin Cash on August 1st earlier this year, followed by Bitcoin Gold on October 23rd. However, we know that there is at least a 3rd scheduled for Nov 25th in the form of Bitcoin Segwit 2x, or B2X as it seems to be widely referred to.
Forks create a fair deal of FUD and pandemonium, and most Bitcoin aficionados desperately hoped that Bitcoin Cash would be the first and the last for years to come. In all honesty, the average Bitcoin holder has very little empathy and even less understanding , of the details of these splits.
All we know is that disgruntled miners are once again splitting what we view as our beloved currency in order to form their own rogue chain of Bitcoin. Not the exciting, nostalgic kind, but rather the nauseatingly familiar form, similar to how you feel when you step into a building that reminds you of an old job they never really took a liking to. But despair not, the tide may be turning as current trends seem to suggest that periodic forking might actually serve to benefit the growth of Bitcoin and the cryptocurrency space as a whole at least in my humble opinion.
Here are a few reasons why hard forks may actually help to build the cryptocurrency eco-system. What you actually have is chain clone. A split implies a severance of value, whereas, what really happens is a cloning or multiplication of assets. Traditional economics would suggest that 2 assets coming from the same stable and serving the market would naturally have to share the market between one another.
However, in the case of both the Bitcoin Cash and Bitcoin Gold splits, what we actually saw was a Bitcoin market value that remained largely unaffected, and the formation of a new currency created an increase in the overall market cap.
Economically this is a very hard concept to accept, since it implies creating something from nothing, but in the digital world this is not only entirely possible, but actually quite common since digital assets are literally created from thin air. One way to be able to comprehend this better is to imagine you own an iPhone yes, I can only imagine this, since I am an Android user , but I digress.
The Applex company then decide to issue a free handset exclusively to owners of the iPhone. Now the Applex iPhoney works almost identically to the iPhone, same hardware, same software, perhaps it even has a superior processor. This is what happens during a hard fork. You receive a clone, but the clone is not really a direct competitor to the original because it lacks the network effect.
Does the clone have value? Has the existence of Applex iPhoney affected the value of your iPhone? Well, perhaps marginally, but it reality, not really. When people worry about forks, they seem to fail to understand that Bitcoin is open source. Anyone could create a new Blockchain identical to Bitcoin today. The threat of a copycat coin is as relevant as a fork. Another factor to consider is that hard fork chain splits do not represent the first major competition that Bitcoin has faced.
In fact, every major iteration of the cryptocurrency space has presented a potential competitive threat to Bitcoin, but ultimately has only resulted in increasing the value and adoption of Bitcoin. Take for instance the first alternative cryptocurrency Namecoin that was launched in , which was soon followed by Litecoin in the following year. Whereas Namecoin had the purpose of decentralising domain names, Litecoin was algorithmically a direct competitor for Bitcoin, designed to operate faster and more efficiently as a currency alternative.
When these alt coins first started to appear on the market, you had the same kinds of fear and uncertainty that we have now in regards to hard forks. However, the genesis of alt coins was far from the death of Bitcoin, and rather, they only served to create an entire cryptocurrency eco system that all in all has bolstered the need and demand for Bitcoin, by providing an additional and more viable spend use for it, outside of daily transactions.
This space is dominated by the BTC pairing that exists on majority of Cryptocurrency exchanges. So we see here that the track record in terms of competitive markets so far has never managed to result in the overall devaluation of Bitcoin.
Will hard forks prove any different? Whether or not you like the idea of forks, they represent a true expression of a decentralised democracy. The day when we mollycoddle and worship Bitcoin as a monolithic deity is the day that Bitcoin becomes a cartel, and we lose sight of what Bitcoin is.
To deny or threaten against the existence of such hard forks is a contradiction in values. What the advent of Bitcoin Gold has proved is that the success of a fork is dependent on adoption, and it is within the power of Nodes, Miners, Exchanges and ultimately Users whether or not they wish to lend their support to a chain.
If, like the Bitcoin Gold team, you propose and present a questionably programmed, somewhat unstable, rushed and morally dubious hard fork, the community will react … or more fittingly, refuse to react , leaving your chain split unsupported and ultimately without an use case.
Proving that a fork is no more powerful than the engagement and attention that it is granted. That is a democracy. That is decentralisation. In this sense, it proves that forks are in fact, a natural evolutionary step of bitcoin or any healthy decentralised democracy.
If we as a Cryptocurrency community had complete consensus on every issue, we would be the most peculiar society in world history! Bitcoin Gold, and indeed Segwit 2x will not be the last forks of Bitcoin in fact, there are already rumours of Bitcoin Silver to fork towards the end of the year. They should be viewed a healthy symptom of the expression of choice and preference that exist in a true distributed economy, and eventually, we will live in a Bitcoin ecosystem where forking of the chain becomes the defacto means to distribution of technological advances in the cryptospace.
When you think about it, what better method do you have to distribute new technology amongst the cryptocurrency eco system, than to fork Bitcoin? I have heard many people argue, very convincingly, that many of these hard forks are deliberate and orchestrated attempts to disrupt and dissuade new investment into the Bitcoin ecosystem.
Now, whereas this might be true, what people seem to be missing is that if forking Bitcoin is indeed supposed to be an attempt to dissuade investment in Bitcoin, it is failing.
Any Bitcoin investor will know that in the run up to a hard fork, Bitcoin has its most bullish rallies. In fact, with every Bitcoin fork, the market dominance of Bitcoin shift slightly upwards. Why is this the case? Forks are providing yet another reason to always ensure that you hold some Bitcoin in your portfolio as they are acting as a dividend for Bitcoin holders. Where else in the world do you get that kind of dividend? Imagine, if Bitcoin forks several times year, you get the opportunity to bolster your portfolio at absolutely no additional cost.
Surely this only enhances Bitcoins reputation as an accumulating store of value. Not only has China all but banned ICOs and Cryptocurrency exchanges, but Korea have looked like they are ready to follow suit with Russia hot on their heals. When China first announced the banning of ICOs and exchanges in September, it sent the market reeling and money came flooding out of the system.
Bitcoin Cash created waves of panic and pandemonium. Bitcoin Gold created a few ripples, and I think by the time we get to Bitcoin Silver, or Bronze, a hard fork will be about as significant as a new ICO. Well first and foremost, prepare for more forks. They are certainly not going away. In fact they are likely to become a common practise, but this is not a bad thing, since their regularity will create a more proportionate response from the community.
Some forks will rightly be given good support and attention, whereas others will be ignored for the scams that they are. Since the legislators and regulators have ICOs in their site, companies will look for new and imaginative way to monetise the world of decentralised applications, so you will find that forking existing open source blockchains will become the means by which firms will tokenise their ventures.
But even the mild success of the Bitcoin Gold and Bitcoin Cash success being that neither are worth zero , will have ignited the spark of opportunity in many an entrepreneur. HODLing is a term referring to Hold On for Dear Life…Finally, and most significantly, the almost inevitable landscape of regular hard forks may result in an increase in the overall market cap and the market dominance of Bitcoin.
More people will buy and hold, simply accumulating multiple assets as hard forks become more popular, and the increased holding hodling may boost the demand and therefore the price of Bitcoin. What do you think? Do you think forking presents a threat or an opportunity to the future of Bitcoin and the Cryptocurrency eco system? Share your opinion below. Tweet This. Why do forks occur? Continue the discussion. Does democratisation exist in the Fintech industry?
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Thursday, November 15, is the day that all Bitcoin enthusiasts have been waiting for with bated breaths. Why is that day special? Well, on that day, Bitcoin Cash, which is whatx fourth-largest cryptocurrency and the most famous hard fork of Bitcoin, will divide into two, creating another cryptocurrency in xo process. To show his support, he increased the maximum block size from 32MB to MB. Ver, on the other hand, is backing the software upgrade proposed by Sechet. Irrespective of the bickering between these two prominent crypto personalities, they have no say in the success of each coin. That task rests solely on miners who will be committing their hash power to each cryptocurrency.
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Remember how I said a soft fork needed to receive the majority vote? Scalability or scaling is the maximum amount of transactions that a particular blockchain can process every second. Bitcoin is very limited in this sense as it can only process an average of 7 transactions per second. Source: cointelegraph. Since this Bitcoin fork was launched, it has been a very successful project. In fact, at the time of writing in June , it is the fourth most valuable cryptocurrency in the industry. Bitcoin is the most important invention in the history of the world since the internet. This is because the vast majority of Bitcoin mining is controlled by just a few pools in China.
Remember how I said a soft fork needed to receive the majority vote? Scalability or scaling is the maximum amount of transactions that a particular blockchain can process every second. Happening with bitcoin foundation is what is very limited in this sense as it can only process an average of 7 transactions per second.
Source: cointelegraph. Since this Bitcoin fork was launched, it has been a very successful project. In fact, at the time of writing in Juneit is the fourth most valuable cryptocurrency in the industry. Bitcoin is the most important invention in the history of the world since the internet. This is because the vast majority of Bitcoin mining is controlled by just a few pools in China. One of the largest mining pools in the industry! Just like the Bitcoin Cash fork, anyone holding Bitcoin at the time of the launch received identical amounts in Bitcoin Gold.
Since it whats so important about bitcoin fork launched, Bitcoin Gold has also performed really. This attack is actually quite ironic because the whole point of Bitcoin Gold was to prevent centralized miners from gaining too much control.
Furthermore, just like Bitcoin fork BTC Gold, the mining mechanism has been modified to prevent people from using expensive hardware, meaning that it is a much fairer and equal network than Bitcoin. Not only is Bitcoin Gold much faster and fairer than the original Bitcoin, but as its name suggests, it also allows more private transactions.
Although each movement of funds is still posted to the public ledger, both the sender and the receiver remain private. Bitcoin Diamond was directly forked from the original Bitcoin client.
The main focus of its development team was to allow users to remain even more anonymous. As a result, if you held 0. Before we move on, take a look at the below comparison chart, which compares the main features of the different forked blockchains. As you probably know, Bitcoin is the first and original cryptocurrency.
There are lots of other blockchain projects that can handle faster, cheaper and more efficient transactions, which makes them much more suitable for a global payment. This is similar to a real-world asset like Gold or Silver.
However, this is only my personal opinion. I could be right or I could be completely wrong! I have also listed 4 of the most popular cryptocurrencies to have been forked from Bitcoin. Save my name, email, and website in this browser for the next time I comment. Error, failed to subscribe. If problem persists contact site administrator. Read. All courses Interactive courses Sign up Free.
Investor in bitcoin-related startups, Roger Ver. You whats so important about bitcoin fork also like. December 11th, Click here to post a comment. Our TOP 5 Reads: 1. Buy Bitcoin with PayPal Quickly. Join thousands of subscribers worldwide. Success, you have subscribed successfully!
What Is A Hard Fork? Bitcoin Hard fork Explanation 🍴🍴
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Levine Bradley Keoun Dec 17, There were also multiple publications around wyats time of the hard fork release that reported that Bitcoin XT nodes and users were attacked en masse to disrupt the project. In fact, here is a graph of the waiting time that a user will have to go through if they paid the minimum possible transaction fees:. As of this writing, it is the fourth-largest digital currency by market capowing in part to omportant backing of many prominent figures in the cryptocurrency community and many popular exchanges. When these alt coins first started to appear on the market, you had the same kinds of fear and uncertainty that we have now in regards to hard forks. Think PlayStation 3 and PlayStation 4. Well, perhaps marginally, but it reality, not really. Bitcoin Unlimited found support from Roger Ver, Antpool, bitcoin. In all honesty, the average Bitcoin holder has very little empathy and even less understandingof the details of these splits. All data collected in the survey is anonymous. Have a question?