Satoshi Nakamoto is a significant figure in the world of crypto. This anonymous software developer launched Bitcoin in 2009, inspiring the creation of many other digital currencies.
Over the years various versions of Bitcoin, like XT, Classic, and Cash, have emerged over the years. These different versions were created through a process called “forking,” where the original blockchain protocol is altered to create new versions.
Blockchain technology was originally intended to operate autonomously. However, a concept known as a “Bitcoin Fork” has emerged, wherein new versions of the blockchain are created with the agreement of the user community. These forks strive to enhance transaction speed and other components of the original system. The effectiveness of these forks hinges on the cooperation of miners and users, who need to update their software in what is called a hard fork.
- Hard Fork: It creates a new blockchain and digital currency, requiring users to decide whether to stay with the old or transition to the new. Hard forks occur when code changes significantly, causing the blockchain to split into two, resulting in a new cryptocurrency with different rules leading to the creation of many well-known coins.
- Soft Fork: BTC’s blockchain is upgraded without creating a new cryptocurrency, allowing users to switch between old and new blockchains. Soft forks are software upgrades for the blockchain, introducing new features or functions while remaining compatible with previous blocks.
Bitcoin forks, often centred around hard forks, significantly alter user interactions and create a new blockchain, shifting mining difficulty, block size, and transaction cost. However, due to the decentralised nature of the blockchain, not all hard forks are embraced by the community, with some members favouring the original setup.
Bitcoin, launched in 2009, has undergone multiple hard forks, including Bitcoin Cash and Bitcoin Gold. Bitcoin Cash aimed to address scalability issues with an increased block size and BCH as its primary digital currency. Bitcoin Gold introduced a new mining protocol for accessibility, using BCG as its native currency. Other forks like Bitcoin Unlimited and Bitcoin Classic faced criticism due to security concerns and centralisation. Soft forks like Segregated Witness improved Bitcoin’s efficiency, transaction times, and security, driving global adoption.
Digital currencies have independent development teams that make network improvements, similar to how internet protocols evolve to improve web browsing. Sometimes, a cryptocurrency undergoes a fork to enhance security, add features, or create new coins and ecosystems.
Bitcoin has a strong track record of driving its price up, with previous halving events causing significant upward momentum. For example, in 2012, Bitcoin’s price soared from $12 to over $200 in just one year. The recent halving in May 2020 saw a significant increase, reaching an all-time high of almost $69,000 in November 2021. The next halving is expected in April 2024, generating excitement in the crypto community. However, market sentiment may not always be favourable during halving events, as some participants may experience fear and uncertainty about the potential effects, leading to short-term price fluctuations and higher volatility.potential effects, leading to short-term price fluctuations and higher volatility.