There have been a number of Bitcoin forks since the world’s oldest crypto launched in 2009. Some are hard forks, which are radical changes that effectively establish a new blockchain. Others are more like modifications to the Bitcoin protocol, called soft forks.
A Bitcoin hard fork happens when miners or developers vote for a significant change to a blockchain protocol, which typically results in a new form of cryptocurrency. A soft fork is similar, but is usually a more subtle shift in the blockchain software that miners and developers can adapt.
Keep reading to learn more about the top Bitcoin forks, how different forks work, and what the forking process may mean for investors.
What Is a Bitcoin Fork?
What is a fork in crypto? A fork is a natural extension of blockchain technology, which uses open-source code that’s designed to be updated and improved upon. Thus Bitcoin forks aren’t bad news, but rather a naturally occurring aspect of the blockchain, which is decentralized and doesn’t adhere to a central authority.
Bitcoin forks generally happen when there is a strong disagreement among miners and developers about how to handle a platform’s protocol or growth. This can happen with any established blockchain, although the number of forks and how they occur can vary considerably from network to network.
While there have been many Bitcoin forks, there have been only a handful of forks on Ethereum, for example.
• A Bitcoin hard fork is a split of the original blockchain, which enables a new platform to be established, often with its own crypto.
• A soft fork is a modification of the existing blockchain.
• There are also instances when a coin forks its code from Bitcoin’s code while creating a new blockchain entirely from scratch.
Hard Forks, Soft Forks, and Other Innovations
A Bitcoin hard fork is a radical change to the Bitcoin protocol, whereas soft forks are subtle software modifications. Also, some different types of cryptocurrency have cloned their source code from Bitcoin to get started, but these aren’t technically considered forks. (See the Bitcoin forks list below.)
The creation of altcoins like Litecoin (LTC) or Bitcoin Cash (BCH), for example, established new blockchains with completely different rule sets. These platforms even use different mining algorithms, meaning the computers that mine them run a different kind of software.
In these cases, the altcoins spawned their own networks from day one, without cloning the existing Bitcoin blockchain and picking up where it left off, as Bitcoin Cash (BCH) did. “Forks” like these are really new projects that just took the core code of bitcoin as a starting point.
The other common kind of fork is known as a user-activated soft fork (UASF). This process is much different than a hard fork because it gets initiated by users of the cryptocurrency rather than the computers maintaining the network (miners).
A UASF works by users adopting a certain action with regard to how they interact with the network of a given cryptocurrency. Then, miners can choose to follow suit afterward if enough users hop on board.
10 Famous Bitcoin Forks
Envision the original Bitcoin blockchain as the center of a large family tree. Emerging from the original trunk of that tree are the many offshoots of Bitcoin, including hard forks, soft forks, and other innovations.
To understand the whys and hows of Bitcoin forks, it helps to review a Bitcoin forks list of some of the most notable forks in Bitcoin’s history.
1. Litecoin
Litecoin (LTC) is a cryptocurrency created in 2011 by former Google engineer Charlie Lee. It was one of the first “altcoins.” Though it’s built on Bitcoin’s original source code, Litecoin was designed to improve upon Bitcoin, especially in terms of transaction speed.
Like Bitcoin, Litecoin uses a proof-of-work system (PoW) to verify transactions on the blockchain, but owing to certain modifications it’s considered a “lighter,” faster version of Bitcoin. The main difference between Litecoin and Bitcoin is that LTC uses a mining algorithm called scrypt, to enable faster transaction times.
Years later, Litecoin also underwent a hard fork of its own, with Litecoin Cash.
💡 Want to learn more about Litecoin? Check out our guide on Litecoin.
2. Bitcoin XT
Bitcoin XT was launched in 2014 by Mike Hearn, one of Bitcoin’s original developers. While the original version of Bitcoin allowed up to seven transactions per second, Bitcoin XT aimed for 24 transactions per second. In order to accomplish this, it proposed increasing the block size from one megabyte to eight megabytes.
While Bitcoin XT gained some traction initially, it eventually lost its momentum and is no longer available.
3. Bitcoin Classic
Bitcoin Classic was a similar story to Bitcoin XT. But instead of increasing the block size dramatically from one megabyte to eight, they created a two-megabyte block. This project has become less popular but still has some active nodes.
4. Segregated Witness
The Bitcoin SegWit update took place on August 23, 2017 and changed the way information was transferred on the blockchain.
Bitcoin developer Pieter Wuille originally proposed the update in 2015. He and others believed that transactions took too long to process and that they had some security issues.
SegWit stands for “segregated witness,” and it’s a key turning point in the history of Bitcoin and cryptocurrency. The SegWit innovation allowed for larger blocks by removing signature (or witness) data from Bitcoin transactions.
This frees up more space for the transaction itself.
5. SegWit2x
SegWit2x was set up to be a Phase Two of SegWit: a hard fork that would also transform the block size allowed on Bitcoin. Unfortunately, SegWit2x didn’t gain the same widespread support as the first SegWit phase, and the hard fork did not occur.
But the failure of SegWit2x helped pave the way for the Bitcoin Cash hard fork.
6. Bitcoin Cash (BCH)
The next time Bitcoin went through a hard fork was in August 2017. The new coin was called Bitcoin Cash (BCH). BCH is similar to Bitcoin (BTC) but with a few key differences.
The biggest difference, and the one that spawned the split, is that BCH has a larger block size. This means that one block in the blockchain can hold a larger number of transactions, resulting in greater throughput. Basically, more money can be processed in less time.
7. Bitcoin Satoshi’s Vision (BSV)
Bitcoin SV is a second-generation fork of Bitcoin; BSV was derived from a fork of the Bitcoin Cash (BCH) protocol which was a fork of the original Bitcoin (BTC) protocol.
As noted above, BCH’s goal was to increase transaction speed to improve Bitcoin’s scalability. Bitcoin SV broke off to become its own cryptocurrency with its aim to maintain the original Bitcoin protocol and become more technologically advanced.
8. Bitcoin Gold
Bitcoin Gold (BTG) is a Bitcoin fork that utilizes an ASIC-resistant proof-of-work mining algorithm. That means it’s meant to be a coin that anyone can mine at home without the need for expensive specialized computer hardware. According to the Bitcoin Gold website:
“BTG is a cryptocurrency with Bitcoin fundamentals, mined on common GPUs instead of specialty ASICs. ASICs tend to monopolize mining to a few big players, but GPU mining means anyone can mine again — restoring decentralization and independence.
“GPU mining rewards go to individuals worldwide, instead of mostly to ASIC warehouse owners, recreating network effects that Bitcoin used to have.”
9. Bitcoin Diamond (BCD)
Bitcoin Diamond, launched in 2017, is yet another Bitcoin fork that aimed to make transactions faster and cheaper.
10. Bitcoin Private
Instead of being a standard blockchain fork, the aim of Bitcoin Private (BTCP) was to create a fork-merger that would create a merge with the ZClassic (ZCL) blockchain via a fork of the Bitcoin blockchain.
This project was driven by Rhett Creighton, who also founded ZClassic, with the idea of combining the privacy of ZClassic with the popularity and security of Bitcoin.
Bitcoin Private launched in March of 2018 and was designed for both transparent and shielded or private transactions.
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Pros and Cons of Bitcoin Forks
Given the range of alterations to the original Bitcoin protocol, there are a number of advantages and disadvantages for investors to consider when Bitcoin forks.
Benefits of Bitcoin Forks
Some forks can create greater efficiencies by speeding transaction times, which increases the number of transactions per second.
Forks can also help to solve security issues.
Downsides of Bitcoin Forks
Bitcoin forks can also create some instability, however. This may impact the price of the crypto in question.
A fork may also make the crypto platform more vulnerable to hacks (like replay attacks), at least temporarily.
How to Claim Bitcoin Forks
Most cryptocurrency exchanges and hardware wallets make it easy for users to access their new coins not too long after a hard fork happens, whether in a few weeks or a few months. There will typically be a new wallet created with the name of the new coin. The balance in the new wallet should be identical to that of the old one.
For more technical users who had their coins on a paper wallet or desktop wallet, however, the process gets tricky.
Basically, a user would have to move their entire balance to a new wallet and then use the private keys from the old one to claim their new coins. This process can be risky and is typically only considered by tech-savvy users.
When done incorrectly, it could result in total loss of all funds for both coins.
In cases like these, less tech-savvy users might end up not claiming the forks at all, as the risk of total loss could be high.
How Has Forking Affected Crypto Prices?
Typically, hard forks can be seen as a money grab by the programmers who create them, because prices tend to rise initially (although they often decline afterward).
Depending on the type of fork, circumstances involved, reason for the fork, user anticipation, and a host of other factors, the resulting impact on price can be unpredictable.
One significant historical example to look at would be the BTC/BCH hard fork of August 2017.
In the period leading up to this fork, there was a great deal of speculation about different possible outcomes:
1. The new coin (Bitcoin Cash) would overtake the old, and most users would migrate to the new network.
2. The original Bitcoin would reign supreme while the new Bitcoin Cash faded into obscurity.
3. The fork would break the entire cryptocurrency and result in the value of both coins going to zero.
Several years later, it appears that those in camp number two were the closest to being correct. Although BCH is still among the 30 largest cryptocurrencies by market cap, as of July 1, 2022, it’s valued at about $108 USD, while BTC is valued at about $19,400.
But at the time, it wasn’t clear at all what would happen. The price of both BTC and BCH surged after the fork.
One BCH rose to as high as $3,000 in late 2017 and early 2018, but has since fallen by over 95%.
As far as the price of BTC goes, there have now been so many hard forks that most people pay no attention, and the impact on price appears to be negligible.
Investing in Bitcoin
In its 13-year history, Bitcoin has seen dozens of forks, both hard and soft. Developers have also used the Bitcoin blockchain to copy and create basic source code for new projects. Some of these forks have resulted in well-known new crypto — like Litecoin and Bitcoin Cash. Some have led to innovations like SegWit, which restructured transaction blocks to make them easier to process.
Interestingly, none of the Bitcoin forks have had a significant long-term impact on BTC’s price over time.
FAQ
How many Bitcoin forks have there been?
There have been dozens of Bitcoin hard and soft forks over the last 13 years. It’s hard to say exactly how many, owing to the complexity of some forks (some of which were successful and others that were not).
Do Bitcoin forks double your money?
It’s impossible to predict. A fork can sometimes drum up investor interest, and the price of BTC could rise, but there is also the risk that a fork that’s viewed unfavorably could cause the price to drop. Similarly, having access to the newly forked coins may or may not give investors a windfall — there’s no way to know in advance.
Is Litecoin considered a fork of Bitcoin?
Yes, Litecoin was created in 2011 as a fork of Bitcoin to create a lighter blockchain that would increase transaction speeds.
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