The Other Bitcoins — A Closer Look at Bitcoin’s Hardforks
For any newcomer to Digital Assets, discovering there are other ‘types’ of Bitcoin can be confusing.
While there are many different ‘flavours’ of Bitcoin, they all share the same roots. At one point or another they ‘forked’ away from the original Bitcoin blockchain and formed their own independent blockchains. If you have ever spent time on a website such as coinmarketcap you will have noticed that besides Bitcoin (BTC) there are a number of different coin listings referred to as Bitcoin. But why is this, and how did this happen?
Because Bitcoin is decentralised, it doesn’t have a single governing body overseeing its future development and governance. What this means is that no single person or group of people can make changes to or can affect the working of Bitcoin — it answers to no one. So, how do changes to the Bitcoin protocol get made?
To implement a change, any decision must be mutally agreed upon in a unilateral way between complete strangers, which in is difficult, to say the least. How then is this achieved? Two words; Nakamoto Consensus.
The Nakamoto Consensus is a set of rules that verifies the authenticity of a blockchain network, using a combination of the proof-of-work consensus algorithm on a Byzantine Fault Tolerance (BFT) peer-to-peer network.
As is the case when any large group of diverse people work together on something, there will inevitably be differing opinions. The same is true for Bitcoin and on how it should best evolve. One of the main issues or topics surrounding the reasoning for forking the original Bitcoin comes from different visions or ideas about how to best scale Bitcoin. The main sticking point revolves around how to most effectively scale the Bitcoin network in order to compete with the likes of Visa and MasterCard.
What the Fork?
The two most well known variations to have forked away from Bitcoin are Bitcoin Cash (BCH) and Bitcoin Satoshi’s Vision (BSV). These are considered the most prominent and ‘successful’ chains. But what are these different versions of Bitcoin? And how did they become to be?
Let us start with the Bitcoin (BTC). Bitcoin is the original version of the Bitcoin protocol launched in 2009 by Satoshi Nakamoto and has remained on the same chain the longest.
The Bitcoin protocol is maintained by a group called “Core”. This is a group of approximately 200 individuals that feel that Bitcoin should remain censor resistant, and prioritise decentralisation over everything else, so that no major player can fully control it. For them, this means placing an emphasis on keeping the client’s system requirements low, which is why Bitcoin’s block size limit has never been increased from 1 megabyte (1MB).
Bitcoin Core’s development is focused on off-chain scalability solutions, such as the Lightning and Liquid Networks. Until these side chain solutions are more widely used, Bitcoin will continue to have higher fees and be slower than other off-chain options.
BCH — Faster and Cheaper than BTC
2017 saw the first major split away from the original Bitcoin blockchain to form Bitcoin Cash (BCH). Bitcoin Cash addresses the scaling issue by increasing its block size from 1MB to 8MB. The rationale being that with a greater capacity of transactions being confirmed at once, Bitcoin Cash wouldn’t experience traffic congestion on the network, and the fees would be much cheaper.
The Bitcoin Cash development community is also free from the bureaucracy of Bitcoin Core, and are able to implement new technologies into their software much more quickly than Bitcoin. It’s worth noting that Bitcoin Cash is heavily promoted on the website bitcoin.com, which has been under some scrutiny for confusing new users about which bitcoin to buy.
BSV — In Satoshi’s Vision
The youngest of the three, Bitcoin Satoshi’s Vision, Bitcoin SV, or simply BSV, and is recognised for its development team led by self-proclaimed Satoshi Nakamoto, Dr. Craig Wright.
The idea behind BSV is to make it corporate-friendly with complete transparency. This includes scaling the capacity of its blockchain in order to process thousands of transactions a second (TPS) to compete with the likes of Visa or MasterCard.
Other ambitions include creating a blockchain-based internet dubbed “Metanet”. With support from deep-pocketed backers, Bitcoin SV continues to grow and attract both new developers and corporations alike.
Despite sharing the Bitcoin title and a similar genetic make up, both Bitcoin Cash and Bitcoin SV are completely different blockchains, with different communities, each with their own rules and objectives.
