Cryptocurrency has become a valuable part of the modern global market. With trading, exchange of commodities, payments, transactions done, and the investing market, cryptocurrencies are not donated in almost every national and international economy. One of the first and most notable cryptocurrencies, Bitcoin, has been in the top charts of cryptocurrency markets and sales.
It was created in 2009 by an anonymous software developer with the help of Satoshi Takemoto, registered and labelled now as the founder of Bitcoin. Check things to know when spending bitcoin to get a detailed guide to Bitcoin trading. Digital currency was the first of its kind to enter the global market; not it is the most valuable digital currency in the world.
Ample cryptocurrencies have been inspired or copied from Bitcoin giving implemented from the market; however, do you ever wonder how?
In this write-up, we will discuss the topic of cryptocurrency hard corking or Bitcoin hard forking as an example and how it helped in the generation of many bitcoin alternates like BitcoinXT, Bitcoin Gold, etc., technical working behind this forking.
How Bitcoin Forking Works
As we know, Bitcoin is a cryptocurrency made based on blockchain technology, which will help manage the bitcoin’s transactions, or in other works such as Bitcoin mining. Essentially, every property of Bitcoin is stored in the blockchain for reference and verification. Whenever any improvement has to be made into Bitcoin, the information in blockchain is used as a model to upgrade the required changes in the bitcoin network worldwide.
The fact that there is no authority to decide the functionality of Bitcoin makes its upgradation harder. For example, as one of the parties upgrades bitcoin’s software implementation and upgrades in its mining procedures, the identity data of bitcoin are upgraded to a newer version with new features and functionality.
The thing with the newer version is that when the user upgrades to the newer version, it rejects any form of transactions and processes stored in the blockchain which has been started in the older version, creating a separate branch of a fresh cryptocurrency. However, the non-upgraded user can still retain their transactions, which leads to a branch construction of two similar cryptocurrencies working parallel but is functioning in a different part or coordinate of the blockchain.
The different branches of Bitcoin
Using the complex forking method, many alternatives to Bitcoin have been made in the market with somewhat similar functionality but a different feature. Let us have a look at them. The first one is BtcoinXT, the first hard forks of Bitcoin, with the same functionality as bitcoin but with some upgradation. While Bitcoin allowed only seven transactions per second, this new version has a higher transaction cap of 24 transactions per second which is possible by increasing the block size eight times the original onto which transactions are stored and verified. But with several losses of funding, it was abandoned.
Another example is Bitcoin Classic, and a hard fork launched after bitcoin XT was abandoned. Bitcoin Classic has decided not to follow the same route as BitcoinXt and increased the blockchain by only two times. However, unlike bitcoin XT, Bitcoin classic still exists with many users, as the larger group still tends towards the original Bitcoin currency.
The next is Bitcoin Unlimited; this branch of Bitcoin has been a question of surprise as the forking done in this is still unknown. However, unlike the other two, which decided themselves the size of the blockchain, it let the miners and investors have the privilege of choosing their recommended blockchain size, with a maximum of 16 times the original. Despite this, Bitcoin unlimited failed to set itself in the market due to functionality problems.
Another example is Bitcoin Gold; this hard fork has set itself up by upgrading its hardware consumption. As Bitcoin mining needs high-level and powerful hardware with significant computing rates, this fork adjusts the minimum mining requirement along with a new pre-mine feature, which automatically limits the mining camp. As a result, Bitcoin gold has many of the fundamental properties of Bitcoin but with different mining authentication due to pre-mine.
This write-up prescribes the complex forking method. Many sub-branches can be made from any cryptocurrency that has similar properties but different modes of working and features, along with some of the most notable hard forks with their properties.