What are bitcoin forks and how do they work?
This type of fork is generally resolved quickly because one of the proposed updates will propagate through the network at a faster rate than the other, soon becoming the consensus blockchain.
Any data contained within an ‘orphaned’ block on the rejected chain is returned to the pool of pending data to be mined again. For this reason, a bitcoin transaction should generally not be considered final until at least six blocks have been mined on top of the block that contains it.
Why are bitcoin forks important for traders?
Many traders pay attention to news regarding software forks for signs of where bitcoin’s price is heading. This is because technological updates – for example those enabling the network to process more transactions each second or reduce its energy consumption – could increase adoption and cause bitcoin’s value to skyrocket.
Alternatively, its price could fall if the network is unable to reach consensus on a popular update, or a hard fork occurs, as a new cryptocurrency could reduce demand for bitcoin.
Bitcoin forks list
As the bitcoin network has grown, transaction speeds have slowed and the energy required to mine new blocks has increased dramatically. Many users are now calling for updates to the underlying protocol.
In May , a group of major bitcoin mining companies met in New York to discuss potential updates. They eventually agreed to implement a hard fork called ‘SegWit 2x’ to double the size of each block, in what was known as ‘the New York agreement’ (or sometimes ‘the Silbert accord’). However, the update was later cancelled – to avoid a network split – when it became clear that there was significant opposition.
As a result of this inertia, there were a number of other hard forks in the latter half of and the start of Here we take a look at some recent bitcoin forks:
| Name | Main features | Fork date | Block height (number of blocks at fork) |
|---|---|---|---|
| Bitcoin cash (BCH) | Increased the size of each block to 8mb – from 1mb for bitcoin – enabling it to process up to eight times more transactions per second. | 1 August | , |
| Bitcoin Clashic (BCHC) | A parody of bitcoin cash, named to sound like Sean Connery saying ‘bitcoin classic’. It too increased the size of each block to 8mb to improve network capacity. | 1 August | , |
| Bitcoin gold (BTG) | Incorporated a new algorithm to make mining accessible to all users, including those without specialist equipment, while reducing energy consumption. | 24 October | , |
| Bitcoin Diamond (BCD) | Increased supply to million coins (from 21 million) and made major changes to the protocol to improve transaction speeds, user privacy (through encryption) and energy consumption. | 24 November | , |
| BitcoinX (BCX) | Much like bitcoin diamond, this cryptocurrency increased supply to billion coins, and introduced smart contract functionality and encryption. | 12 December | , |
| Super Bitcoin (SBTC) | Added smart contract functionality and encryption, and increased the size of each block to 8mb. | 12 December | , |
| Lightning Bitcoin (LBTC) | Adopted a new algorithm to reduce the time taken to mine new blocks from ten minutes to three seconds, enabling it to process up to 24 million transactions per day. | 18 December | , |
| Bitcoin God (GOD) | Introduced ‘proof-of-stake’ mining to reduce energy consumption. It also added smart contract functionality, and increased the size of each block to improve transaction speeds. | 27 December | , |
| Bitcoin Atom (BCA) | Incorporated a hybrid mining model that includes proof-of-stake and the original proof-of-work model, which it claims improves blockchain security. Its team is also working to develop a system to reduce transaction costs and enable micro-payments. | 24 January | , |
| Bitcoin Private (BCPH) | An unusual cryptocurrency that was formed from a ‘co-fork’ of both bitcoin and zclassic (ZCL). It encrypts transactions to ensure that metadata including the sender and recipient remain private. | 28 February | , |
Fox BTC (FBTC) | This cryptocurrency’s protocol increased supply to 27 million coins, and included a hybrid mining model, 10mb blocks and a target block interval of three minutes. | 30 April | , |
| MicroBitcoin (MBC) | This coin was created with the intention of lowering the cost of transactions and encouraging the public to mine with graphic processing units (GPUs). | 28 May | , |
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