In mid-November, the hardfork of bitcoin (SegWit2x) was due to take place, but the leaders of the companies leading the initiative decided to abandon this idea. As they say in their address, the implementation of the hardfork without the consent of the community would lead to a split in the mining capacities and, as a result, the emergence of competing blockchains
HardFork is the division of the cryptocurrency into two chains by changing the processing rules and adding blocks. After the hardfork, one branch works with nodes that support the new rules, and the second – with nodes that refused to support the changes.
Since the advent of bitcoin-blockchain has gone through a lot of hardforks. Some of them did not gain popularity for one reason or another (lack of support, bugs in the software), for example Bitcoin Unlimited, Bitcoin Classic, Bitcoin XT.
In today’s article, we will recall all the important hardforks: who, when and for what purpose, tried to “divide” bitcoin-network.
Creation bitcoin: genesis-block
History bitcoin began in 2008, when its creator Satoshi Nakamoto issued a document that officially introduced a new crypto currency. In early 2009, he activated the network and generated the first block – the genesis block. For this, a reward of 50 bitcoins was received. At that time, the protocol worked with a block size of 1 megabyte and processed a maximum of 7 transactions per second.
When the bitcoin network began to expand, some of the restrictions became inconvenient. For example, a megabyte block, although it was a mechanism to protect against DDoS attacks, adversely affected the network bandwidth. Therefore, people began to look for options to expand the functionality of bitcoin-blockchain.
Bitcoin XT is the first fork in bitcoin history. The client Bitcoin XT was launched by Mike Hearn (Mike Hearn) in December 2014. Mike implemented several new features, including his own BIP 64 (Bitcoin Improvement Proposal). BIP 64 is an extension to the P2P protocol, allowing you to quickly view the list with unused transaction outputs (UTXO) to protect the system from re-wasting the already “translated” bitcoins.
Also, the Bitcoin XT fork task was to increase the transaction processing speed to 24 transactions per second by “expanding” the block to 8 MB. Therefore, at the start of the new protocol was popular in the community: in August 2015, the network worked four thousand nodes.
But over time Bitcoin XT lost popularity. He never managed to gain a critical mass of users – 75% – to become a “standard”. In part, this was due to the insufficiently secure implementation of certain functions. The project did not receive support from the largest mining pools in China, and industry expert Meni Rosenfeld published a comment on Reddit, which said that XT is a reckless act that destroys a stable structure and can lead to a split in the community.
By early 2016, the project was almost dead. Bitcoin XT is supported so far, but it is considered an extremely small crypto currency – there are less than 20 nodes running on the network. For comparison, there are 11 thousand knots in the main bitcoin network.
Although Bitcoin XT failed, the community did not abandon the idea of increasing the block size and speeding up transactions. In February 2016, the development team conducted a new fork and created Bitcoin Classic. The source code for the project can be found on GitHub. He laid out the developer Gavin Andresen (Gavin Andresen).
The increase in the Bitcoin Classic block was more modest, but still significant, to 2 MB. However, eight months after the launch, the creators changed the policy, market participants began to determine the size of the block. Also, any user of the Bitcoin Classic network could influence the decision making about the edits in the source code.
Fork was supported by several major players in the market: Coinbase, Bitstamp, Circle and Jeff Garzik (Jeff Garzik), CEO of Bloq. However, immediately after the launch, it began to lose popularity.
Until recently, the Bitcoin Classic network operated 100 nodes (compared to 2 thousand at the start), and on November 10 this year, developers announced the termination of support for the blockchain. Bitcoin Classic release manager Tom Zander wrote that all the ideas pursued by Bitcoin Classic now “promote” Bitcoin Cash (another bitcoin fork).
Members of the Bitcoin Classic network were recommended to start using alternative wallets, because the work of the official client will be stopped in the coming weeks.
The stable release of Bitcoin Unlimited occurred in May 2016.
The idea of the project is that each miner can independently choose the block size. If a large number of miners are working on large blocks, while others say that they do not mind joining, then the network automatically starts generating blocks of a larger size.
Removing the restrictions, Unlimited developers wanted to give the market the opportunity to regularly vote for the ideal block size. This was to resolve the dispute over the size of the block forever.
Bitcoin Unlimited has faced a number of serious incidents related to reliability. In the BU code, there were bugs that allowed attackers to conduct a DDoS attack, and in April 2017 more than 70% of the nodes failed due to memory leaks.
But despite a number of difficulties, the Bitcoin Unlimited project is still relatively popular fork and has 500 full-featured nodes. Track the development of Bitcoin Unlimited in their repository on GitHub.
At the end of 2015, developer Pieter Wuille presented the SegWit-Segregated Witness initiative, which increases the processing speed of bitcoin transactions. The approach does not increase the block size, but changes the way the transaction is stored.
SegWit offers to remove from the structure all the signatures, which, according to the programmer Pieter Wuille, occupy 60% of the entire bitcoin-blockchain, and transfer them to another data structure – the extension unit. SegWit was approved by 95% of the miners and was activated on August 24, 2017.
SegWit did not expect to increase the size of the blocks, so some participants felt that the innovation would not solve the problem of scaling, but only postpone it. The development team, led by a former Facebook engineer, Amaury Sechet, announced that it would like to keep the structure of the blockchain the same (without taking the information out of it), but increase the block size to 8 MB.
The developers of the new client did not wait for the support of the community, but simply announced the date when the branch starts working. HardFork was named Bitcoin Cash, and from August 1, 2017, Bitcoin Cash wallets began to reject the blocks and transactions of the original bitcoin.
Despite the spontaneous launch, the project was supported by many major players, including the investor Roger Ver and the mining platform ViaBTC.
An interesting feature of Bitcoin Cash was the ability of miners to switch between Bitcoin and Bitcoin Cash, depending on the profitability of “mining” a particular currency. The phenomenon was named “opportunistic mining”.
Today, this fork remains popular, and its network employs more than 1,200 nodes.
The purpose of Bitcoin Gold is to reduce the influence of “industrial” miners on the network. Developers implement a framework that would allow any user to drop crypto on the GPU and remain competitive.
The network was launched on November 12 this year, but the start of the crypto currency was unsuccessful. The cost of Bitcoin Gold, which jumped sharply the day before, fell by about half in a day and fell below $ 200 per token. And three days after the launch, Bitcoin Gold’s mining pool was closed due to unprofitability. The owner of the MinerTopia pool called BG mining “a waste of time and resources”.
The main trades of Bitcoin Gold occur on the exchange platforms Bitfinex, HitBTC and Changelly. Some users still believe in the project and are convinced that the course of “gold” will grow.
This is the failed hardfork of bitcoin, which was originally signed by many CEOs of large companies in the bitco-ecosystem. SegWit2x was supposed to be a compromise for SegWit supporters and those wishing to increase the block size (up to 2 MB).
However, some of the cryptocommunity consider that SegWit2x does not solve the scalability problem and can lead to centralization of the block network, which contradicts the original concept of crypto currency. It turned out that the decision to unite the community only split it more strongly. It became unclear which of the two bitcoin-networks will be considered the main (Bitcoin Core or alternative).
The state of uncertainty was reinforced by the fact that fork-client developers refused to include protection against replay attacks. The attack looks like this: a user of one network copies a check with the signature of another user and offers it for approval to another registry. So an attacker can spend other people’s money in another blockchain, because one signature is valid in two registries.
These discontent about SegWit2x appeared during the Breaking Blockchain conference. Even the hashtag # no2x appeared. Then many key companies announced that they would not support SegWit2x, but in this case the likelihood of hardfork was maintained. For example, Coinbase announced that they will name the new Bitcoin2x network.
But the hardfork did not happen. The community rejected this idea because of a lack of consensus. On the Bitcoin2x side, there was a preponderance in the hashreit (85%) and BitPay, Coinbase, Blockchain.com, BTCC, etc., and on the Bitcoin Core side – a recognized development team and a larger number of complete nodes.
Ordinary users would have to decide which of the two blockchains to join and which wallet to use. Therefore, in the case of a hardfork, “a battle for a true bitcoin” would begin, in which each side would bite off pieces from one pie.
Since the winner in this battle was not obvious, the hardforks were postponed indefinitely. Until there is no need for it.
The recent fork of bitсoin, which occurred on November 24. Its organizers are anonymous developers, who organized the Bitcoin Diamond Foundation.
Bitcoin Diamond received an 8-megabyte block and a new mining algorithm, optimized for working with the GPU. More developers have implemented SegWit and implemented protection against replay. It is also believed that the anonymity of the new coin is higher than that of bitcoin – the transaction amounts and balance in BD are encrypted.
This is the third hardfork of bitcoin for the last four months, if do not take into account the delayed SegWit2x. And in the short term, forks have a positive effect on the course of the “main” crypto currency, but the problem is the “fragmentation” of the market. The fact that with the banning of ICO in China, to many more developers can lead to even more ramifications, many developers began to consider the creation of forks as a substitute for raising funds.
And although the community is concerned that a large number of alternative crypto currencies will weaken bitcoin, while it remained relatively stable, despite some shocks.