Which Bitcoin? A beginner's guide to Bitcoin forks | Bitcoin Cash, Bitcoin SV
Did you know there's more to Bitcoin than Bitcoin? Find out more everything you need to know about Bitcoin forks, including Bitcoin Cash and Bitcoin SV (coming in app soon!)
What is Bitcoin anyway?
When we talk about Bitcoin, it's easy to assume we’re talking about one, unchanging thing. But Bitcoin is an open technology. Anyone can use it, and anyone can build on it. And indeed they have. Since Bitcoin appeared in 2009, Bitcoin has gone through many offshoots. This is what the community refers to as a hard fork.
You can view this diversity as a good thing. It means everyone in the crypto space has access not only to Bitcoin. They also have access to alternative visions of what Bitcoin should be. Today, let's look at some of those alternative Bitcoin visions and why they might be of interest to you.
Also, be sure to stay reading for further info as we will be adding one of these Bitcoin forks to the Zumo app soon!
How can there be more than one Bitcoin?
One of the big things about Bitcoin is that it has no central authority. There’s no government or central bank. The whole system is governed by a fixed set of mathematical rules. If you want to participate, you have to agree to the rules - that’s consensus. The rules apply the same to everyone, everywhere. It’s what has allowed Bitcoin to cut out the middlemen of the traditional financial system.
This is great - so long as everyone agrees. What happens, though, when the consensus breaks?
Diverging paths: Bitcoin forks
How much should users pay to process a transaction? How long should it take to make a transfer? What fundamental purpose does the network serve?
These are the questions that have driven development in the Bitcoin ecosystem. And when developers are unable to agree, you get a Bitcoin fork.
Imagine a fork in the road. One road becomes two, and you the driver are free to choose either route. The history will always be shared, but the future direction will be its own.
So when you see a listing like Bitcoin Gold, Bitcoin SV or even Bitcoin Lambo, you know you’re dealing with a Bitcoin fork. At some point, a subset of the Bitcoin community decided to strike out in its own direction, with a set of updated governing rules incompatible with the original Bitcoin protocol.
Once the fork has taken place, the two paths of the road become completely separate things. Each has its own coin, its own governing rules.
It’s happened a lot, too. According to online estimates, there are currently 45 active Bitcoin hard forks.
But what makes them appealing in their own right? Why would you ever consider a Bitcoin fork alongside big brother Bitcoin?
Bitcoin Cash (BCH): the most famous Bitcoin fork?
Bitcoin Cash, a Bitcoin hard fork that occurred in August 2017, is one of the best known Bitcoin forks.
To its backers, Bitcoin Cash goes to the heart of the debate about Bitcoin’s purpose. Is it a payment system or is it a store of value? In 2017, Bitcoin critics thought Bitcoin was too slow, too limited in capacity and too unpredictable in its fees.
The solution? Enable more transactions, faster, by increasing the volume of transactions processed in a single block. If the Bitcoin blockchain was processing transactions in tiny cups, Bitcoin Cash proposed to replace petite pots with a much bigger bucket.
It was an early attempt to address a question of scalability that has followed Bitcoin throughout its history. Today, Bitcoin Cash is the 12th ranked cryptocurrency by market capitalisation (ahead of such established cryptos as Litecoin) and has its own ecosystem of supporters and developers.
Bitcoin Cash went to show that Bitcoin forks with the right backing could still be successful in the marketplace. Not only that, they could potentially offer a viable alternative to Bitcoin holders with differing views of Bitcoin’s role in the cryptosphere.
Bitcoin SV (BSV): a fork of a fork
Bitcoin SV - Bitcoin Satoshi’s Vision - is in many ways the continuation of the narrative about what exactly Bitcoin should be. It is, in fact, a fork of a fork - a further 2018 fork of the Bitcoin Cash fork that took place in 2017.
The ongoing question: what was the closest to the original vision set out by creator Satoshi Nakamoto in his Bitcoin whitepaper?
In its response, Bitcoin SV went further even than Bitcoin Cash in its approach to block size. If Bitcoin Cash had introduced a bucket, Bitcoin SV now wanted a basin in the continued quest for scalability and transaction throughput.
To sum it up though, the clue is in the name: everything Bitcoin SV does is shaped by its stated mission to stay as close as possible to Satoshi’s original vision.
Bitcoin forks: key takeaway
Ultimately, all Bitcoin forks share a common past - but their own unique vision of the future. One of the beauties of the crypto ecosystem is that each individual has the freedom to follow the path that best aligns to their vision.
Earlier, we asked whether Bitcoin is a payment system or a store of value - maybe, through its forks, it can someday be both.
PS: BSV to go live in the Zumo app
If you’ve enjoyed finding out more about some of Bitcoin’s main offshoots and the thinking behind them, you may also be interested to know that you will soon be able to hold Bitcoin SV with Zumo’s easy-to-use crypto wallet.