A History of Bitcoin Hard Forks

What Are Bitcoin Hard Forks?

A Bitcoin hard fork is a protocol change that creates a new set of rules for the computers that make up the blockchain network. If a hard fork is implemented without the complete agreement of other network participants, it can cause the cryptocurrency network to split into two.

A hard fork is different from a soft fork, which is a protocol change that does not cause a rejection of the pre-existing rule set. A hard fork requires all network participants to upgrade to the new rule set and reject the old rules, while a soft fork will continue to accept transactions created by the old rule set.

It is through this forking process that various digital currencies have been created. For the casual cryptocurrency investor, it can be difficult to tell the difference between these cryptocurrencies and to map the various forks onto a timeline. Below, we'll walk through many of the most notable forks from the Bitcoin blockchain.

Understanding Bitcoin Hard Forks

A blockchain generally consists of three layers: the protocol layer, the network layer, and the data layer. The protocol layer consists of the programming that makes the blockchain work. Because it is software, it needs to be upgraded to address issues or make changes members of the community and/or developers want to make. Sometimes, these changes are supported by everyone, and sometimes, they are not.

When changes to the protocol layer create a blockchain that is not compatible with the previous blockchain, it is called a hard fork. Hard forks essentially make a new blockchain and cryptocurrency, but the latest editions are not always a split away from the original—they might be changes to the main blockchain that requires a fork. However, most people use the term hard fork to describe a blockchain, cryptocurrency, developers, participants, and users that separate themselves from the original blockchain and network while using the altered version.

A Timeline of Bitcoin Hard Forks

Bitcoin XT (2014)

Bitcoin XT was one of the first notable hard forks of bitcoin. The software was launched by Mike Hearn in late 2014 in order to include several new features he had proposed. While the previous Bitcoin version 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.

Bitcoin XT initially saw some success, with updates and nodes operating until late 2018, when it was essentially abandoned. Bitcoin XT is no longer maintained.

Bitcoin Classic (2016)

While Bitcoin XT had some attention from the cryptocurrency community, some members still wanted Bitcoin block sizes to increase. In response, a group of developers launched Bitcoin Classic in early 2016. Unlike XT, which proposed increasing the block size to eight megabytes, classic intended to increase it to only two megabytes.

Like Bitcoin XT, Bitcoin Classic saw initial interest. The project also still exists today, with some developers strongly supporting Bitcoin Classic. Nonetheless, the community seems to have generally moved on to other options as it is no longer maintained.

Bitcoin Unlimited (2016)

Bitcoin Unlimited has remained something of an enigma since its release in March 2016. The project's developers released code but did not specify which type of fork it would require. Bitcoin Unlimited set itself apart by allowing miners to decide on the size of their blocks, with nodes and miners limiting the size of blocks they accept, up to 16 megabytes.

Despite some lingering interest, Bitcoin Unlimited has largely failed to gain much acceptance.

Bitcoin Cash (2017)

Some Bitcoin developers and users decided to initiate a hard fork in order to avoid the protocol updates brought about by the segregated witness implementation. Bitcoin Cash was the result of this hard fork. It split from the main blockchain in August 2017, allowing for blocks of 32 megabytes, which speeds up network transaction processing times.

Bitcoin Cash remains the most successful hard fork of the primary cryptocurrency. On March 22, 2024, it was the seventeenth largest digital currency by market cap.

Bitcoin Gold (2017)

Bitcoin Gold was a hard fork that followed Bitcoin Cash in October 2017. The creators of this hard fork aimed to bring mining back to graphics processing units (GPUs), as they felt that mining had become too specialized in terms of equipment and hardware required.

One unique feature of the Bitcoin Gold hard fork was a "post-mine," a process by which the development team mined 100,000 coins after the fork had taken place. Many of these coins were placed into a special "endowment," and developers have indicated that this endowment will be used to grow and finance the Bitcoin Gold ecosystem, with a portion of those coins being set aside as payment for developers as well.

Generally, Bitcoin Gold adheres to many of the basic Bitcoin principles. However, it differs in terms of the proof-of-work (PoW) algorithm it requires of miners.

Bitcoin—Satoshi's Vision (2018)

Satoshi's Vision, or BSV, was created as the result of a split in the Bitcoin Cash community by a handful of figures surrounding Craig Wright, a controversial person who has claimed to be the original creator of Bitcoin. Wright's version of the protocol proposed to increase the blocksize by hundreds of times, allowing cheaper transactions and more throughput for decentralized applications.

Although Wright's claims to have created Bitcoin are now discredited, the project attracted a following from some developers and supporters. Bitcoin SV was hard forked from Bitcoin Cash in November of 2018, although it now has only a fraction of the users and transaction volume of either Bitcoin or Bitcoin Cash.

The Bottom Line

Since its introduction in 2009, Bitcoin has spawned a large number of forks. Some have attempted to imitate it, and others to improve upon it in different ways or to avoid changes. While no one can say for sure, the cryptocurrency will likely continue to experience both soft and hard forks in the future.