There have been several attempts in recent years to hard-fork the protocol rules of Bitcoin to produce offshoots. Bitcoin is the most popular cryptocurrency by capitalization. Bitcoin has forked multiple times in its short history, producing forks like BitcoinXT or Bitcoin Classic. There weren’t any notable forks during the majority of Bitcoin’s existence. In 2017, two forks were notable, Bitcoin Cash And Bitcoin gold. Due to the popularity of Bitcoin Cash, many more forks have been announced since the end of 2017
Forks that were announced at the end of 2017 include Super Bitcoin, Bitcoin Platinum (also known as Bitcoin Platinum), Bitcoin Ore (also known as Bitcoin Cash Plus), Bitcoin Uranium (also called Bitcoin Silver), Bitcoin Silver God, Bitcoin Cash Plus and Bitcoin Cash Plus.
What makes these altcoins different from other crypto-assets currently on the market? We will now discuss what a hard fork is and how it differs from an altcoin.
Hard Forks and Altcoins: What are they?
Altcoins are alternative cryptocurrency coins. Most altcoins (forks) are variants of Bitcoin. These altcoins are created using Bitcoin’s original, open-source protocol, but with modifications to the underlying code. This creates a completely new coin, with different features. Bitcoin, the original cryptocurrency created in 2009 and the biggest in terms of capitalisation since then, is still the most popular. Bitcoin is the world’s most popular crypto currency, as millions of people trade the 16,000,000 bitcoins that are currently electronic in circulation. Bitcoin, quite simply, is the gold standard of the digital currency asset category.
Hard forks are permanent deviations from the main block chain of a cryptocurrency. They usually occur when one party does not agree with changes made by another. Hard forks can occur when the main block chain becomes compromised and a brand new chain must be created in order to restore stability. This is a rare situation. Ethereum’s hard fork was a reaction to the DAO attack.
On crypto assets networks with a small user base, hard forks can be easily implemented. This job gets more challenging as the networks become larger and more decentralized.
Both altcoins, and hard forks, involve creating a new crypto-asset network. However, in a case of hard forks, this new network is created solely to upgrade an existing crypto-asset network. In a hard-fork you’ll also receive the exact same amount of tokens that you owned on the main network at a certain point called a snapshot. This means anyone with 100 bitcoins in the original network would have the equivalent 100 coins in the new network. This method can be used to create new altcoins. There is always an initial token distribution via crowdsale or mining.
It is also worth noting that a hard fork is impossible without consensus. It can lead to the creation of an altcoin when there’s no universal agreement. Hard forks are protocol changes that require users to upgrade. Without a near-universal agreement from nodes of an existing crypto asset network it is difficult to argue that the new network was simply an upgrade to the old one.
Bitcoin Cash (Bitcash), which was created on August 1, 2017, is considered the most successful Bitcoin split of all time. Bitcash was not well-supported when launched. This meant that it was a brand new alternative coin, rather than an update to the bitcoin system.
A “spinoff” coin is a type of altcoin that allows current bitcoin owners to receive a new alternative currency based on UTXO values at a certain point in time. The only two other spinoff coins to gain any kind of recognition in the cryptocurrency community, besides Bitcash, are Bitcoin Gold and Bitcoin Private.
