A Bitcoin fork is a change to the Bitcoin protocol that makes previously invalid blocks/transactions valid (or vice-versa). This requires all Bitcoin nodes or users to upgrade to the latest version of the bitcoin software.
Bitcoin forks occur when two or more miners find a block at a similar point in time. As a result, they end up with different versions of the blockchain. This can result in two types of bitcoin forks: hard and soft.
What is a hard fork?
A hard fork creates a new version of the bitcoin blockchain, leaving the old one behind. This means that anyone who was using the old software will no longer be able to participate in the new blockchain. As a result, hard forks can be quite contentious and often lead to disagreements over which chain is the “true” bitcoin blockchain.
What is a soft fork?
A soft fork is a less severe bitcoin fork that allows nodes running the old software to still participate in the new blockchain. This is because the old bitcoin software can still recognize blocks created by miners running the new bitcoin software. As a result, soft forks are generally seen as less contentious and controversial than hard forks.
Do soft forks mean an upgraded blockchain?
In a soft fork, the upgraded nodes will recognize the new blocks as valid but the old nodes will not. This is because the new bitcoin software is backwards compatible with the old software. As a result, there is no need for everyone to upgrade in order to continue using bitcoin.
However, it’s important to note that if enough miners upgrade to the new bitcoin software, then the old bitcoin software will eventually be unable to keep up with the new blockchain. This is because it takes more time for miners running older versions of bitcoin’s codebase to find blocks than miners running newer versions of bitcoin’s codebase. As a result, soft forks that are not backwards compatible will eventually result in an upgraded bitcoin blockchain.
What are the benefits of soft forks?
There are several key benefits to Bitcoin soft forks. First, Bitcoin soft forks allow for a greater degree of backwards compatibility with older Bitcoin clients and miners. Secondly, they bring several improvements to the Bitcoin network, things such as lower transaction fees, better security and improvements to blockchain technology can be done without hard forks. All Bitcoin transactions are sustained with a soft fork. If you have a Bitcoin improvement proposal, you can submit it to the Bitcoin community and if enough miners agree then it will be pushed through.
What are some of the biggest Bitcoin hard forks?
The most notable bitcoin hard forks include Bitcoin Cash, Bitcoin Gold, and Bitcoin Diamond.
What is Bitcoin Cash?
Bitcoin Cash is a hard fork of bitcoin that was created in August 2017. Bitcoin Cash is notable because it increased the block size limit from one megabyte to eight megabytes. This allows for more transactions to be processed at once, which speeds up the overall transaction time. Bitcoin cash BCH uses the ticker BCH.
What is Bitcoin Gold?
Bitcoin Gold is a hard fork of bitcoin that was created in October 2017. Bitcoin Gold is notable because it uses a different mining algorithm (Equihash) than bitcoin does. This allows for more people to mine bitcoin gold, as it is not as reliant on specialized hardware.
What is Bitcoin Diamond?
Bitcoin Diamond is a hard fork of bitcoin that was created in November 2017. Bitcoin Diamond is notable because it increased the block size limit to eight megabytes, just like Bitcoin Cash. However, Bitcoin Diamond also implemented something called “proof-of-stake” mining. This means that people can mine bitcoin diamond by holding onto their coins rather than by actually solving bitcoin diamond mining puzzles.
How do I claim Bitcoin forked coins?
If you held bitcoin at the time of a hard fork, you will likely be able to claim coins on the new blockchain. This process can be a bit tricky, so it’s best to consult with an expert or explore one of the many online resources that are available.