Why fork bitcoin?

 

The Bitcoin fork has helped many people get rich overnight. Thanks to the innovations of the developers, the holders of the cryptocurrency were able to double their income. The event itself caused a stir in the world of bitcoin, and the developers were repeatedly reproached for issuing "blank" coins. What is a fork and how to make money on it, are discussed below.

What is a Bitcoin fork?

Translated from English, fork is a fork. In the usual version, the chain is straight, all the links go one after the other. When several chains lead to one link at once, we can talk about a fork of the bitcoin cryptocurrency. One chain usually branches, after some link of chains there are two, and they begin to work in parallel, that is, they do not depend on each other in any way.

Bitcoin hard fork is one of the prime examples of this model. When a fork occurs, a new cryptocurrency appears. Bitcoin did just that in 2017. After the fork, another cryptocurrency appeared - Bitcoin Cash . Now they work together, independent of each other.

The main prerequisites for a fork are overloaded networks, an increase in the cost of transactions, and a long processing time for payments.

What are the differences between soft fork and hard fork?

Bitcoin's new hard fork is a classic example of an independent currency fork. Now Bitcoin Cash is independent of the main cryptocurrency, Bitcoin. After the fork, he completely separated from the main player and exists on the market independently. They have different courses , different people work on them and, from a technical point of view, they are very different. Bitcoins operate with different wallets and attract customers on their own. 

In the case of a soft fork, bitcoins remain linked. Most often, this is done in order to improve the existing system and make some changes to the functionality . In order not to throw users into new conditions, a new, more perfect one is created on the basis of the old currency. So, the system keeps the basic principles of functioning unchanged , just makes some improvements.

Before the advent of smart bitcoin, there was a debate about whether it was necessary to create a new cryptocurrency or should be limited to a soft fork. However, the hard fork turned out to be not only an acceptable technical solution, but also a good marketing tool, which subsequently led to the creation of Bitcoin Gold, Bitcoin Diamond and other currencies.

The main forks of bitcoin

The creation of Bitcoin Cash is far from the only example of a fork. Here is a list of all the forks of the bitcoin cryptocurrency:

• Bitcoin Cash - August 2017
• Bitcoin Gold - October 2017
• Bitcoin Diamond - October 2017
• Super Bitcoin - December 2017
• UnitedBitcoin - December 2017
• Bitcoin hot - December 2017
• Lightning Bitcoin - December 2017
• Bitcoin God - December 2017
• Bitcoin Segwit2x - December 2017
• Bitcoin Uranium - December 2017
• Bitcoin Cash Plus - December 2017
• Bitcoin Smart - January 2018
• Bitcoin Pizza - January 2018
• Bitcoin Interest - January 2018
• Quantum Bitcoin - January 2018
• Bitcoin Hush - January 2018
• Bitcoin LITE - January 2018
• Bitcoin Private - January 2018
• Bitcoin Atom - January 2018
• Bitcoin Sudu - February 2018
• ...

There is no information on the next hard forks yet. If there are new hard forks, an announcement should appear on the developer's official website.

Hard forks happened for a variety of reasons. For example, Bitcoin Cash was created because the capacity of regular bitcoin was not enough to quickly carry out all transactions. For comparison: the block capacity for bitcoin before the fork was 2 megabytes, and for bitcoin cash after the fork it was 8.

When creating Bitcoin Gold, the developers also assured that they are doing this in order to simplify the work with wallets. They planned to make mining more accessible and easier for the average user. As a result, the rate at first jumped to 6 thousand dollars, but later dropped to 5600.

With Bitcoin Diamond, it was planned to speed up the transaction processing process even more. As a result, they became public, commissions decreased, and the work of the blocks accelerated.

And also the capacity of blocks in bitcoin diamond after the fork became 16 MGB (compared to 2 megabytes for bitcoin), which increased the number of transactions and the speed of mining.

Why bitcoin hard fork?

The main reason for the Bitcoin hard fork is system improvements. The new bitcoins have better technical specifications and powerful blocks. They help mine faster and give lower transaction fees.

Another example of a hard fork is the Ethereum cryptocurrency. In 2016, a fork took place and a new currency, Ethereum Classic, appeared. It was more convenient for smart contracts and fundraising through crowdfunding; its creation was preceded by a lot of controversy and doubts. Until now, some argue that the fork was in vain and it was better to leave everything unchanged.

The most important event since the btc hard fork is that bitcoin holders have doubled their income. If earlier a certain amount of bitcoins was stored on the balance, then after the fork of the bitcoin, the same amount was added to the bitcoin cash. All transactions that took place on the bitcoin exchange also take place for the new bitcoin cash. Important note: this only applies to exchanges that have supported the fork.

The same thing happens after every hard fork. Bitcoin owners have additional money in the new currency that they can sell to others. An important point: bitcoins are not automatically credited after the fork. You need to write to the exchange and ask to add new bitcoins (not everywhere).

If the creation of bitcoin cash was explained by the need for technical improvements, then subsequent forks were just a way to make more money. Who doesn't want free coins? That is why new hard forks were carried out so that people would buy bitcoins and increase their rate.

When a new currency is forked, most of the money does not go to miners and incumbents, but to the developers themselves. And bitcoin has already been scolded for fraud. After the fork and the creation of Bitcoin Paladium, there were many complaints: the developers created new coins only to steal the real bitcoins from their owners.

What should miners do?

It is the miners who determine the fate of the new currency after the fork. If they are willing to channel their energies into supporting the new player, the start will be successful. An example of this is bitcoin atom. After the hard fork, many miners have turned energy to support Bitcoin Cash, however, whether they will do so in the future is a controversial issue for many experts.

Together with the increased capacities, the bitcoin hard fork brought extra expenses for miners. Networks have become more complex and miners' revenues from Bitcoin Cash mining have declined. It is clear that people will invest resources where they can make good money. How profitable the currency can be after the hard fork of bitcoin will become clear after the establishment of a more or less stable exchange rate and the first token sales. Until then, the bright future of Bitcoin Cash is a moot point.

To protect your coins from the negative effects of a hard fork, it is recommended that you keep your coins in a personal wallet, which is protected by private passwords. Then, after creating a new currency, coins will be available in all wallets.

Bitcoin hard fork is a controversial phenomenon. Whereas earlier some saw it as a way of technical improvement, now for many forks are seen as a means of profit . Many are sure that new cryptocurrencies are waiting for the fate of Ethereum, for which the creation of Ethereum Classic did not live up to expectations.

The most important thing for currency holders during a hard fork is to provide reliable protection for their wallets and not become a victim of the selfish desire of Bitcoin developers to get rich. 

How do you feel about bitcoin forks? Are they even needed? We are waiting for your comments.