What is a bitcoin (BTC) fork?

Bitcoin fork is a term that describes the division of the bitcoin chain, in simple words, a new updated group of code “branches off” the traditional network.

Bitcoin was invented in 2008, and since then it has been constantly updating: developers create new forks in order to optimize the cryptocurrency mining process.

What is a Bitcoin fork and what you should know about it

A fork can lead to the creation of new coins, then such fork is called a hard fork, if new coins are not being created, but the chain gets a software update — this is a soft fork.

The first Bitcoin fork, Bitcoin XT, was released in 2014. Bitcoin XT sought to increase the number of transactions per second from 7 to 24. Although the fork was initially successful, users eventually lost interest to the project and abandoned it.

The most famous and popular Bitcoin hard forks are Bitcoin Cash and Litecoin.

Bitcoin Cash was the result of a hard fork of Bitcoin in 2017. The new coin forged in this fork became Bitcoin Cash (BCH). It is similar to Bitcoin, but BCH has a larger block size. This means that one block in the blockchain can contain more transactions, resulting in more capacity: more money can be processed in less time.

Litecoin (LTC) appeared in 2011, this cryptocurrency was created by former Google engineer Charlie Lee. It was one of the first “altcoins”. Although it is built on the Bitcoin source code, Litecoin was developed to improve the speed of Bitcoin transactions.

Like Bitcoin, Litecoin uses a Proof of Work system to verify transactions on the blockchain, but due to certain modifications, it is considered a “lighter” and faster version of bitcoin. The main difference between Litecoin and Bitcoin is that Litecoin uses a different mining algorithm — scrypt — which speeds up transaction times.

A few years later, the Litecoin network also received a hard fork, and that’s how Litecoin Cash was created.

There are several reasons why you should pay attention to Bitcoin forks.

• You can start mining a new coin through a fork, and it will be better than using the original bitcoin.
• The fork can affect the Bitcoin community and even the price of bitcoin.
• Finally, you can profit from the fork by selling the new coins.

The existence of forks is important for several reasons:

• It upgrades blockchain. Since the number of blocks in the chain is constantly increasing, it becomes heavy and slow. Bitcoin forks contribute to the “zeroing” of the network, thereby transactions in the chains begin to work faster.
• It helps to update technical parameters. The faster the network, the more blocks it can process, which is why programmers are striving to improve the current blockchain: increase the speed of the chain, strengthen security and increase the level of decentralization of the blockchain. They achieve these results by changing hashing algorithms, block sizes, etc.
• Security and decentralization. Miners could abuse the system and monopolize the blockchain, and forks allow you to fight the monopoly. Altcoins create a balance in the mining pool environment — more pools can resist the creation of one big monopoly pool.

How to obtain coins using forks?

Getting a new coin as a result of a hard fork is easy: you just need to find services or platforms that support forks. It can be both crypto-exchanges and wallets. Keep bitcoins in your account and when the next fork happens, you will receive coins automatically. Any owner of BTC can get an altcoin without even knowing about the fork happening. This method of obtaining cryptocurrency looks as convenient as cloud mining.

Cryptocurrency exchange is the best option for receiving altcoins after the hard fork. The exchange itself will notify you about the fork and send you new coins without your request. However, you can only receive coins if your wallet is equipped with a private key. If Bitcoin is stored on a platform that does not support forks, then you need to create an account on another site that supports forks.

As a general rule of thumb for participating in forks, you should always read reviews about the project — there are still a lot of scammers that want to trick you and get your crypto. Find out who is developing the project, what experience they have, how far they have progressed in their roadmap, what is written about them in other publications, etc. If the information is reliable and true, then perhaps the fork is indeed legal.

Will Bitcoin be the number one cryptocurrency forever? Tough question. There are many other blockchain projects that can process faster, cheaper and more efficient transactions. Perhaps Bitcoin will always be the number one cryptocurrency in terms of usage, value, and market capitalization, which means that more and more forks will appear so miners will have more opportunities to get new coins. Any of the forks of bitcoin may well take a leading place in the crypto market and remove bitcoin from the pedestal.