New Bitcoin Forks That Deserve Your Attention
In August 2017, the first new coin appeared as a result of the bitcoin fork: Bitcoin Cash. Since that moment forks have become a trend. And in October 2017 appeared Bitcoin Gold and in November 2017 appeared Bitcoin Diamond. Most people are still wondering what forks are, how they happen and what their benefits may be. Below I will consider the answers to these questions and also list the new 2018 bitcoin forks.
What is a fork?
A fork is a simple change to the bitcoin code, or rather to a network protocol. Simply said, someone decided to change the rules of the network. To implement changes, you need the consent of most users. If it’s achieved, then the rules change. If no consensus is reached, two forks are created (one with the old rules, the other with the new ones). For example, when creating Bitcoin Cash, the block size was increased from 1MB to 8MB, which allowed processing more transactions. Some users supported the new coin and switched to Bitcoin Cash, while others continued to use the original network. It’s worth considering that this is a simplified explanation of the phenomenon of forks. There are two types of forks: soft and hard. In the first variant, the new rules are integrated into the existing system and no new coins are created. In the latter, the code changes so drastically that it’s impossible to do without creating a new coin.
Why are the forks important?
You probably wondered, why you need forks at all? There are several reasons why bitcoin owners are so worried about them:
- You can switch to coin with new rules, which are better than the original protocol.
- Fork affects the original network and the price of bitcoin.
- You can make a profit from the fork by selling new coins.
Slightly confusing, but remember the main thing. Any bitcoin holder receives the same amount of a new asset. The process is not automatic, you’ll need developers to make new wallets, so they will support the created coins. After receiving a new crypto, you can store it or trade it.
Most notable old and new forks
- Bitcoin Cash and Bitcoin Gold don’t need a special presentation, as these forks took place long ago and coins are traded on all major exchanges.
- On February 28th, the fork called Bitcoin Dollar should take place. Traditionally, the developers of the project declare the maximum reliability and security of the new currency. Ensuring the security and reliability of the new currency should be the integration of two mining algorithms: POW (Proof Of Work) and POS (Proof Of Stake), ensuring consensus or confirmation of the transaction. This hybrid model is aimed at enhancing the stability of the network and excludes the sabotage of the system from a certain group of miners. In the future, developers have plans to launch a trading platform for the exchange of digital tokens. As for mining, this process will be built in such a way that coins won’t be available for production by using mining centers operating on ASIC devices. Instead of scaling bitcoin, the BTD team decided to create a corrected decentralized system, thereby ensuring the availability of a digital method of sending cash payments to users around the world.
- On February 25th, the fork of Bitcoin Atom (BCA) will take place. It’s reported that the new cryptocurrency should become a real discovery for users due to the found solution for network scaling, as well as a number of other innovative options. Again, there’s the use of the hybrid model of POW and POS. In addition, it’s planned to integrate the Lightning Swaps (LS) solution, which eliminates the need to register on the exchange services. Users will have the opportunity to make p2p exchanges, for which it’s enough to have only a safe wallet with a positive balance. Transactions will be confidential.
- Bitcoin Private. This fork with not yet announced start date will provide all bitcoin holders with the exchange ratio of 1 to 1. In the work on the BTCP project, according to the developers, more than fifty people are involved. According to the available information, the coin code will be open. Specific exchanges have not yet reported about the support of the new cryptocurrency.
While waiting for the new forks of bitcoin, one must bear in mind that often their creators themselves admit that they don’t have long-term plans and the issuance of a new coin is akin to an obvious scum, as happened, for example, in the case of Bitcoin Platinum. Therefore, first of all, one should remember about personal safety.