Understanding forks and Bitcoin variants

NEW DELHI: Bitcoin enjoys incomparable popularity, with a market capital of $1.24 trillion on October 21 after the all-time high value of $66,000, according to CoinMarketCap.
But there are also cryptocurrencies such as Bitcoin Cash and Bitcoin SV, which belong to the same Bitcoin family, with some fundamental similarities and differences.
What led to the emergence of these newer versions? How are they different from each other? We start by first trying to understand Bitcoin forks that are responsible for the creation of Bitcoin variants.
Forks and their types:
A blockchain fork is simply an upgrade in the network initiated either by developers or the crypto community.
* A soft fork has a minor upgrade and needs only a majority of nodes to upgrade to the latest version.
– It is ‘backwards-compatible’, which means that the upgraded chain can successfully share and use data from earlier versions of the network.
– Soft forks bring small changes and do not separate from their parent chain.
* Hard forks bring major changes and require all the nodes to upgrade to the new rules.
* Mostly they lead to permanent separation from the old chain, making newer versions incompatible to the older version like in Bitcoin Cash.
A Bitcoin fork was created through a hard fork, as a result of disagreement within the Bitcoin community over speed, transaction fees and block size or to add more features to the existing Bitcoin. So far, there have been 100 BTC forks, out of which 74 versions have survived and are still functional.
Bitcoin variants: Bitcoin Cash and Bitcoin SV:
Bitcoin Cash (BCH)
Origin:
* It emerged as a result of a hard fork in August 2017.
* The upgrade Segwit2x was proposed by a fraction of the Bitcoin community to scale up the blockchain by increasing the block size and lowering transaction fees.
* However, Segwit2x would also burden the miners and full-node operators to store excessive data.
* The proposal led to the creation of a hard fork, Bitcoin Cash (BCH).
* BCH is the second largest fork of the network and considered electronic cash.
* Its block size is 32 MB while BTC has a block size of just 1 MB.
* The transaction cost is substantially lower and a faster transaction rate of 200 TPS than 5-7 TPS of BTC.
* Bitcoin Cash further forked and bifurcated into Bitcoin Cash ABC and Bitcoin Cash Node (BCN).
Bitcoin Satoshi Vision (BSV)
Origin:
* In November 2018, BSV was created by the efforts of the Australian Computer scientist Craig Wright who persuaded the community to increase the block size of BCH to 128 MB.
* Bitcoin SV expanded its block size to 1 TB, obviously much larger than Bitcoin.
* BSV’s transaction cost is the lowest among the three variants of Bitcoin, and is at a high transaction speed of 9000 TPS due to its large block size.
* BSV uses the scaling platform Bitcoin Scaling Test Network (STN) to achieve the desired scalability.
* Educational platforms such as Bitcoin SV Academy and banking application Gravity give the biggest use cases for the adoption of BSV.
* BSV’s supporters hail it as the genuine peer-to-peer financial infrastructure, true to the vision of Satoshi Nakamoto (the famed pseudonymous person who created Bitcoin).
* It is priced at $170.80 on October 27, according to CoinmarketCap.
Other leading Bitcoin hard forks include Bitcoin Gold, Bitcoin Cloud, Bitcoin Classic and Bitcoin Private.
Key similarities in BTC, BCH and BSV
* All three Bitcoin variants have the same stock supply of 21 million coins, and the total supply of the three coins is expected to be exhausted by 2140.
* Both BCH and BTC work on the PoW (Proof-of-Work) model.
* Just like Bitcoin, the BCH blockchain ensures transparency, is publicly accessible and cannot be modified by a single entity.
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