What is Bitcoin fork? Differences between BTC, BCH, and BSV

A Bitcoin fork refers to a change in the underlying protocol of the Bitcoin blockchain, which results in a divergence into two separate versions of the blockchain. This can happen as a result of a disagreement within the community about the direction of the cryptocurrency, or to introduce new features or improvements. There are two main types of forks: soft forks and hard forks. Soft forks are backward-compatible changes that do not require all nodes to upgrade, whereas hard forks are non-backward-compatible changes that require all nodes to upgrade to the new version.

What is a Hard Fork?

A hard fork is a significant change to the protocol of a blockchain network that results in a permanent divergence from the previous version of the blockchain. When a hard fork occurs, all nodes and users must upgrade to the new version of the software to continue participating in the network. If some users do not upgrade, they will continue to operate on the old blockchain, effectively creating two separate blockchains. Bitcoin Cash (BCH) and Bitcoin SV (BSV) are examples of hard forks from the original Bitcoin (BTC) blockchain.

Bitcoin (BTC)

Bitcoin (BTC) is the original cryptocurrency that was created by an anonymous person or group using the pseudonym Satoshi Nakamoto in 2009. It operates on a decentralized network of computers that maintain a public ledger of all transactions, known as the blockchain. Bitcoin's primary purpose is to serve as a peer-to-peer electronic cash system, enabling users to send and receive payments without the need for intermediaries like banks.

Bitcoin's protocol has undergone several soft forks and one significant hard fork, which led to the creation of Bitcoin Cash. The original Bitcoin blockchain continues to be the most widely used and recognized cryptocurrency, with the largest market capitalization and the most extensive network of users and miners.

Bitcoin Cash (BCH)

Bitcoin Cash (BCH) is a hard fork of the Bitcoin blockchain that occurred on August 1, 2017. The primary motivation behind the creation of Bitcoin Cash was to address the issue of scalability and transaction speed on the Bitcoin network. Bitcoin Cash increased the block size limit from 1 MB to 8 MB, allowing for more transactions to be processed per block and, therefore, increasing the throughput of the network.

Bitcoin Cash aims to be a more scalable and user-friendly version of Bitcoin, focusing on its use as a medium of exchange rather than a store of value. It retains many of the same features as Bitcoin, including the use of the SHA-256 hashing algorithm and the Proof of Work (PoW) consensus mechanism.

Bitcoin SV (BSV)

Bitcoin SV (BSV), which stands for Bitcoin Satoshi Vision, is a hard fork of Bitcoin Cash that occurred on November 15, 2018. The fork was initiated by Craig Wright and Calvin Ayre, who believed that Bitcoin Cash had deviated from the original vision of Bitcoin as outlined by Satoshi Nakamoto. Bitcoin SV aimed to restore this vision by increasing the block size limit to 128 MB and removing certain features that they believed were not part of the original Bitcoin protocol.

Bitcoin SV focuses on scalability and the ability to handle a high volume of transactions at low fees. It also aims to enable more complex smart contract functionalities and data storage on the blockchain, positioning itself as a platform for enterprise-level applications.

Differences Between BTC, BCH, and BSV

The differences between BTC, BCH, and BSV are primarily related to their block size limits, transaction speeds, and intended use cases. Here is a detailed comparison of these three cryptocurrencies:

• Block Size Limit: Bitcoin (BTC) has a block size limit of 1 MB, Bitcoin Cash (BCH) increased this to 8 MB, and Bitcoin SV (BSV) further increased it to 128 MB. The larger block size allows for more transactions to be processed per block, increasing the scalability of the network.

• Transaction Speed and Fees: Due to its larger block size, Bitcoin Cash can process more transactions per second than Bitcoin, resulting in faster transaction times and lower fees. Bitcoin SV aims to further improve transaction speed and reduce fees by increasing the block size even more.

• Intended Use Case: Bitcoin (BTC) is often seen as a store of value and a long-term investment, while Bitcoin Cash (BCH) focuses on being a practical medium of exchange for everyday transactions. Bitcoin SV (BSV) aims to be a platform for enterprise-level applications, enabling complex smart contracts and data storage on the blockchain.

• Community and Support: Bitcoin (BTC) has the largest and most established community, with widespread adoption and support from businesses and institutions. Bitcoin Cash (BCH) and Bitcoin SV (BSV) have smaller but dedicated communities that support their respective visions for the future of cryptocurrency.

• Consensus Mechanism: All three cryptocurrencies use the Proof of Work (PoW) consensus mechanism, but they have different implementations and philosophies regarding the role of miners and the security of the network.

How to Obtain BCH and BSV from BTC

If you held Bitcoin (BTC) at the time of the hard forks that created Bitcoin Cash (BCH) and Bitcoin SV (BSV), you would have received an equivalent amount of the new cryptocurrencies. Here is a step-by-step guide on how to claim your BCH and BSV from BTC:

• Claiming Bitcoin Cash (BCH):

  • Check your eligibility: If you held BTC on August 1, 2017, you are eligible to claim BCH.
  • Choose a compatible wallet: Use a wallet that supports both BTC and BCH, such as the Bitcoin.com wallet or the Electron Cash wallet.
  • Import your private keys: Import your BTC private keys into the BCH-compatible wallet. This will allow you to access your BCH.
  • Send your BCH to a new address: Once you have access to your BCH, send it to a new BCH address to separate it from your BTC.

• Claiming Bitcoin SV (BSV):

  • Check your eligibility: If you held BCH on November 15, 2018, you are eligible to claim BSV.
  • Choose a compatible wallet: Use a wallet that supports both BCH and BSV, such as the Bitcoin.com wallet or the Electron Cash SV wallet.
  • Import your private keys: Import your BCH private keys into the BSV-compatible wallet. This will allow you to access your BSV.
  • Send your BSV to a new address: Once you have access to your BSV, send it to a new BSV address to separate it from your BCH.

Frequently Asked Questions

Q: Can I still claim BCH and BSV if I sold my BTC after the forks?

A: If you sold your BTC after the forks but before claiming your BCH and BSV, you may still be able to claim them if you have access to the private keys associated with the BTC address that held the coins at the time of the forks. However, if you transferred your BTC to an exchange or a new wallet without claiming the forked coins first, you may not be able to claim them.

Q: Are BCH and BSV considered legitimate cryptocurrencies?

A: Yes, both Bitcoin Cash (BCH) and Bitcoin SV (BSV) are considered legitimate cryptocurrencies with their own blockchains, communities, and use cases. However, their legitimacy and value are subject to market forces and the opinions of individual investors and users.

Q: How do the mining processes differ between BTC, BCH, and BSV?

A: All three cryptocurrencies use the Proof of Work (PoW) consensus mechanism and the SHA-256 hashing algorithm for mining. However, the mining processes differ in terms of block size and the rewards for miners. Bitcoin (BTC) has a block reward of 6.25 BTC per block, Bitcoin Cash (BCH) has a block reward of 6.25 BCH per block, and Bitcoin SV (BSV) has a block reward of 6.25 BSV per block. The larger block sizes of BCH and BSV allow for more transactions to be included in each block, potentially increasing the revenue for miners.

Q: What are the potential risks of holding BCH and BSV?

A: Holding BCH and BSV comes with similar risks to holding any cryptocurrency, including market volatility, regulatory uncertainty, and the potential for security breaches. Additionally, BCH and BSV have smaller market capitalizations and less widespread adoption than BTC, which may make them more susceptible to price fluctuations and liquidity issues.