What is Bitcoin Forking?
Forking is when the basic protocol of bitcoin has been changed and suddenly the blockchain splits. There is a fork in the road.
One of the limitations of bitcoin that seems to plague many users is the size cap on the block. One megabyte seems to be too small to make sense. In 2010, it might have been okay but in the streaming world of today, it seems to be prohibitive. Developers tried to find ways to improve bitcoin, at least to their way of thinking, their changes would be improvements.
The issue is that the changes had to appeal to enough people in the crypto currency community so that the new cryptocurrency would be accepted. A shot at changing this protocol was Bitcoin XT. This forked bitcoin core which is the basis of the bitcoin network. In 2015, the plan was to allow the block to have a cap of 8 megabytes. It would increase the number of transactions that could be contained in each block.
It was not a popular idea and it quickly faded and within a year, it was relegated to history. Then came the Bitcoin Classic software change that would see the block size changed to 2 megabytes. This fork did not gain enough support to survive either. It was just a variation on the XT plan.
Bitcoin Unlimited allows miners to be more flexible in choosing the block size they preferred. Some still use this implementation of bitcoin.
In August 2017, Bitcoin Cash was a bitcoin hard fork following a change in the protocol. Its block size cap was set at 8 megabytes. Bitcoin and bitcoin cash went their separate ways on August 1, 2017. Bitcoin cash seems to be doing well, valued at $1,174 three months after the fork. The bitcoin price continued to rise after the split.
On October 23, 2017, there was another hard fork with Bitcoin Gold emerging. The change in the protocol this time was related to the hashing algorithm. Because of the difficulty of mining bitcoin and the requirement for ASIC hardware, bitcoin gold is designed to be mined with GPUs. Its hash is called equihash. It cannot be sped up with special equipment, which ASIC is. This means that it is more equitable for the regular user who can mine for bitcoin gold with a gaming computer.
When a cryptocurrency forks, the new currency begins with a genesis block. This is just fancy terminology for the first block in the new currency. The genesis block in bitcoin was the first of such a block. The clever Satoshi Nakamoto buried a message in the bitcoin genesis block. This was the message, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” It was also hard-coded to be non-spendable.