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Hardfork Bitcoin Cash and other well-known attempts to improve Bitcoin and ethereum

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It is not a secret that the fourth in terms of cryptocurrency capitalization Bitcoin Cash enjoys a rather ambiguous reputation among the ardent supporters of Bitcoin and the wider community. Nevertheless, the hard forks of this network, scheduled for Thursday, November 15, are attracting increased attention both due to the recent scandals between the key players of the project, and because of obvious disagreements regarding its further development. As a result, apparently, there will be two competing chains and, accordingly, free coins for BCH holders.

The fact that Bitcoin Cash itself appeared as a result of a controversial hard forks, breaking away from the main Bitcoin network in the summer of 2017, adds a piquancy to the situation. This project also served as a kind of catalyst for the emergence of a whole Pleiad of other Bitcoin forks, which were very difficult for an unprepared user to understand.

The first bitcoin hardfork Bitcoin Cash, however, was not. Similar precedents, including in several other cryptocurrencies, have already taken place. The most significant of them BlockchainJournal offers to recall in this review.

To begin with, however, it is necessary to remind what fork is. We wrote about this in detail in our special card , so we will limit ourselves to the fact that fork (English – plug) is a modification of the software source code, or, in other words, a change in the rules according to which the generated blocks are recognized as valid (valid).

Genesis block

Also, for a better understanding of the nature of forks, it is necessary to return to creating the very first block of Bitcoin, also known as the genesis block . This happened in January 2009, when a certain Satoshi Nakamoto announced the release of the first implementation of the cryptocurrency software client. It was with its help that the genesis block was generated.

This first client came out under version 0.1.0, that is, Satoshi Nakamoto assumed from the very beginning that the software would be improved and new releases would be released.

At the very beginning, when Satoshi himself and several other Bitcoin pioneers were engaged in mining, the software upgrade was not a big problem. However, when the capitalization of the first cryptocurrency increased to several million and then billions of dollars, any major changes in potential began to bear the threat of the entire network. Fortunately, since Bitcoin by its nature does not have a single central point, one person or group of people cannot make such decisions — this requires a broader consensus.

Key features of the original Bitcoin software

Block size: 1 MB
Algorithm: Proof-of-Work (based on Sha-256)
Block mining speed: 10 minutes
Change of difficulty: every 2096 blocks (approximately 2 weeks)
The number of transactions per second: a maximum of 7 (4.4 on average).

Upgrades

Bitcoin is wonderful because any developer can contribute BIP (Bitcoin Improvement Proposal), that is, a proposal to improve Bitcoin. After that, the team of the most popular Bitcoin Core client today (which is at least several dozen experts working independently of each other) starts to study and review it. If the proposal is approved, the corresponding code can be included in the next release, after which the miners and operators of network nodes (nodes) decide whether they want to upgrade to the new version or not.

Most updates are more technical in nature, eliminating various minor bugs, and therefore software upgrades are often not required. However, this is not always the case: some of them are critical and require that the software upgrade be carried out by all network members. This is the same fork – code change, which results in the formation of two software versions and two separate blockchains. One of them supports the new modified code, the other – its old version.

Another important nuance is that there are two types of forks – hard forks and soft forks. The first is the easiest to understand. When it is implemented, the new version of the software rejects all transactions supported by the old version, that is, is backward incompatible.

Hardfork: nodes on which no software has been updated reject the new rules, resulting in the division of the blockchain into two chains

Another type of upgrade – softfork – is backward compatible. In practice, this means that the new software will accept the transactions supported by the old version, but the old version will not understand the transactions performed by the new version.

Softfork: blocks that do not support the new rules are rejected by the new software version

Bitcoin xt

The first in the history of Bitcoin hardfork called Bitcoin XT was introduced in December 2014 by Mike Hern and was aimed at increasing throughput up to 24 transactions per second. To this end, it was proposed to increase the block size to 8 MB.

At the initial stage, Bitcoin XT received support from a part of the community, and by the end of the summer there were more than 1000 nodes with the implementation of this client. This was largely due to the inclusion in the client of BIP 101, which Gavin Andresen had previously developed. This proposal envisaged an aggressive increase in the block size from 1 MB to 8 MB from the beginning of 2016, followed by a doubling every two years.

The developers' plans were to get the support of 75% of miners, but they could not realize these intentions. Within a few months, the project lost its previous support and was virtually dead. In February 2016, Andresen recalled the BIP 101 , the number of Bitcoin XT nodes by then also began to decline markedly. Technically, Bitcoin XT is available in the Bitcoin network today, however, as shown by Coindance data, the client is implemented with just one node. At the same time, a client with the same name is present in the Bitcoin Cash network, where it was implemented by about 1% of the nodes.

Bitcoin classic

Despite the decline in interest in Bitcoin XT, part of the community still believed that increasing block size would be the best way to scale Bitcoin. As an alternative solution, at the beginning of 2016, the same Gavin Andresen suggested Bitcoin Classic , the main difference between which and XT was to increase the block size to 2Mb.

Bitcoin Classic also initially enjoyed some support – the number of nodes was about 2,000, and rumors were actively spreading that large mining pools from China were ready to accept this implementation of the main Bitcoin protocol.

Nevertheless, Bitcoin Classic was also waiting for oblivion – three months after Bitcoin Cash broke away from the Bitcoin network, the project was closed . At the same time, the developers who worked on this client stated that the goals that he had originally pursued were achievable with Bitcoin Cash.

Bitcoin unlimited

The Bitcoin Unlimited project for the first time loudly declared its existence in October 2016, allocating grants in the amount of several hundred thousand dollars to fund research, which should result in “restoring the Bitcoin network in the form in which Satoshi Nakamoto represented it”. Also, the developers said they would seek to increase bandwidth due to changes in consensus.

The name of the project speaks for itself: it was proposed to the miners themselves to determine the size of the mined blocks within 16 MB. Despite the problems identified in the early stages of the project, in March 2017, its first block of Bitcoin Unlimited extracted the Antpool pool supported by Bitmain. It also quickly became clear that this hardfork was supported by the same people who later organized the Bitcoin Cash project.

Bitcoin Unlimited was probably the closest to actually form a separate chain, but eventually realized itself on the Bitcoin Cash network, where as of November 13, it accounted for almost 35% of all nodes. Up until today, this has made him the second largest client of the project.

Bitcoin Cash

Hardfork Bitcoin Cash appeared in response to the softfork Segregated Witness (SegWit), when part of the influential industry players said that they were not satisfied with any further bitcoin way in implementing Bitcoin Core, or trying to increase the block size to 2MB using SegWit2x . Its activation took place on August 1, 2017 – from that day, the wallets created for the new network began to reject transactions and blocks of the first cryptocurrency.

The initial block size in the Bitcoin Cash network was 8 MB, but in May 2018 its own hard forks were held , the result of which was its increase to 32 MB. OP_CODES, providing functionality for implementing smart contracts and other solutions, were also activated.

It is important to note that the May upgrade of the network was fully planned – on its eve, the miners and full nodes updated their clients to the required versions. However, the release of a new version of the Bitcoin ABC client (v. 0.18.0) in August was not accepted by all Bitcoin Cash supporters, after which the first talk about a possible network split appeared.

It was then that the self-proclaimed Satoshi Nakamoto, Craig Wright, teamed up with the entrepreneur and creator of the cryptocurrency news resource and CoinGeek pool Kelvin Eyre, offering his version of Bitcoin Cash called Bitcoin SV with an increase in block size to 128 MB. Moreover, as advocates of Bitcoin SV insist, future client upgrades will make it as close as possible to its very original Bitcoin protocol under version 0.1.0.

Bitcoin gold

In November 2017, Bitcoin Gold was launched – another bitcoin hardfork, the developers of which decided to stand out as a separate project. The stated goal of Bitcoin Gold was to create a truly “decentralized Bitcoin”, while using the Equihash algorithm was designed to make coin mining easier using graphic cards. The block size was kept at the level of 1 Mb, however, 100 thousand coins, generated immediately after the fork, were sent to a special fund and to pay developers.

Despite the fact that the project can be said to have taken place, and today this cryptocurrency is ranked 20th in terms of capitalization, not everything went smoothly. So, in May 2018, 51% of Bitcoin Gold was attacked , which is why developers had to carry out their own intranet hardfork. As a result , a modified Equihash-BTG algorithm was activated , which is not supported by classic ASIC miners. Another unpleasant consequence of the May attack was the withdrawal of BTG from trading on the Bittrex exchange.

Other famous hard forks

Among other well-known forks in a wider ecosystem of cryptocurrencies should first be called hardfork Ethereum, which consisted in the summer of 2016. Then, having decided to save the funds of the investors of The DAO, Ethereum developers decided to conduct a hadforka. Understanding of such a step is not found at all, and as a result there was a project Ethereum Classic, remaining in the original chain, while Ethereum actually became a new chain.

Not all hardforks, however, are controversial. Often they are carried out after making the appropriate decision and carrying out the necessary training, and the main goal of such upgrades is a general improvement in performance, the elimination of bugs or the implementation of new important functions.

As an example, there are several other hard forks in the Ethereum network, as well as plans for developers to further improve the network. Also own hardfork was conducted in the network Ethereum Classic. Other notable examples include the activation of the Bulletproofs protocols in Monero and Sapling in Zcash .

In conclusion, it should be added that hard forks have already become an integral part of the cryptocurrency ecosystem and will undoubtedly occur in the future. Most of them, as can be expected, will be directed specifically at improving networks and further innovations. As for the controversial hard forks, today's events on the Bitcoin Cash network will most likely open a new chapter to the industry, the content of which will be known only in the future.

Andrew Asmakov

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TOP 10 CRYPTOCURRENCY

#NamePriceMarket CapChangePrice Graph (24h)
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  • bitcoinBitcoin (BTC) $ 20,265.00
  • ethereumEthereum (ETH) $ 1,352.48
  • cardanoCardano (ADA) $ 0.431542
  • polkadotPolkadot (DOT) $ 6.38
  • litecoinLitecoin (LTC) $ 54.36
  • chainlinkChainlink (LINK) $ 7.83
  • stellarStellar (XLM) $ 0.119359
  • bitcoin-cashBitcoin Cash (BCH) $ 122.46