Bitcoin hard fork history: both a split and a growth

Continuing to decline from a high of $69,000, the entire crypto market followed the pace of Bitcoin into a bear market that had continued for almost 2 years.

In 2023, which is close to Bitcoin’s halving, people are beginning to expect the 2024 crypto market to go bullish again under the leadership of Bitcoin, just like the past three bull markets.

However, history will not simply repeat itself. Bitcoin’s development curve has leveled off, and it needs a new catalyst to rush upward.

^{Bitcoin is expected to be halved for the fourth time in April 2024 [1]}

The miner’s block reward will drop from the current 6.25 BTC to 3.125 BTC. In the current situation of 6.25 block rewards, according to BTC.com data, the current Bitcoin mainstream mining machine price is in the range of 14,000 to 20,000 US dollars. After the halving, with no increase in computing power and significant changes in transaction fee revenue, the price of Bitcoin needs to reach 40,000 US dollars or more so that miners can maintain the Bitcoin network without losing money and have the motivation to maintain the Bitcoin network.

However, with every bull market, Bitcoin’s gains are shrinking, and computing power continues to increase. In fact, since 2018, Bitcoin has outperformed many large US stocks. The increase is only close to Amazon and Netflix. Apple’s increase is 3 times that, and Tesla has even surpassed it by 8 times.

Even in a bear market, Bitcoin’s computing power continues to improve

Price trend after the first three halves

Each round of halving, Bitcoin’s increase was less than the previous round

After Bitcoin mining is over, the question of how to keep miners in the network and maintain Bitcoin security was raised soon after Bitcoin was born. Increasing transaction fees is clearly not advisable; increasing transaction volume to increase miner revenue is the only path. As a result, attempts to expand Bitcoin’s capacity have never stopped, and Bitcoin hard forks continue to occur as a way to “find better bitcoins.”

Bitcoin hard fork history

A Bitcoin fork is defined as a change in the Bitcoin network protocol or a situation that occurs “when two or more blocks have the same block height.” Forks are often done to add new functionality to the blockchain to reverse the impact of hacks or catastrophic mistakes. A fork affects the effectiveness of network rules. A fork requires consensus to be reached before it can be resolved; otherwise, there will be a permanent split, which in turn will become a hard fork.

However, depending on the object and purpose of a hard fork, a hard fork can be divided into several categories.

1. Hard fork of the Bitcoin client

1. Bitcoin XT

Bitcoin XT is one of Bitcoin’s earliest famous hard forks and was initiated by Mike Hearn. Prior to the actual fork, Mike Hearn released BIP 64 ^[2] on June 10, 2014, proposing to add “a small P2P protocol extension that performs UTXO searches given a set of exit points.” On December 27, 2014, Hearn released the 0.10 version of the forked client XT, which included changes to BIP 64.

^{In August 2015, Bitcoin XT adopted Gavin Andresen’s release of BIP 101 [3], which changed the block size limit to 8 MB/block, and raised the TPS of Bitcoin XT to 24.} Bitcoin XT was initially successful, with over 30,000 to 40,000 nodes running its software in late summer 2015. However, after just a few months, the project lost interest from users and was essentially abandoned by users.

2. Bitcoin Classic Bitcoin Classic

When Bitcoin XT falls, some community members still want to increase the block size. In response, a group of developers launched Bitcoin Classic in early 2016. Unlike XT’s proposal to increase the block size to 8 MB, Classic intended to increase it to only 2 MB.

Like Bitcoin XT, Bitcoin Classic initially sparked interest, with a node range of around 27,000 to 200,000 nodes over a few months of 2016. The project still exists today, and some developers strongly support Bitcoin Classic.

3. Bitcoin Unlimited Bitcoin Unlimited

Since its launch in early 2016, Bitcoin Unlimited has been a mystery. The project’s developers released the code, but didn’t specify what kind of forks it required. Bitcoin Unlimited is unique in that it allows miners to decide on the size of their blocks, and nodes and miners limit the block size they accept, up to 16 Mbytes. That changed in November 2016, and the project moved to a solution that moved the limitations of software rules into the hands of miners and nodes. The complexity of changing rules has made Bitcoin unlimited largely unacceptable.

2. Hard fork of Bitcoin

This is the most common type of Bitcoin hard fork. It creates a new blockchain network by changing network rules and sharing transaction history with Bitcoin from a specific time ago.

The following is a list of the hard forks that split Bitcoin by date/block:

• BCH - Bitcoin Cash original chain, fork block: 478558, date: August 1, 2017. Customers can get 1 BCH for every 1 Bitcoin they hold
• BTG-Bitcoin Gold, fork block: 491407, date: October 24, 2017, customers can get 1 BTG for every Bitcoin they hold
• BSV - Bitcoin SV, fork block: 556766, date: November 15, 2018, customers can get 1 BSV for every 1 Bitcoin Cash they hold
• XEC, fork block: 661648, date: November 15, 2020, customers can get 1 XEC for every BCH they hold

1. Bitcoin Cash BCH

Bitcoin’s first hard fork occurred on August 1, 2017, thus BCH was born. The fork was initiated by the Bitcoin Infinity team mentioned above, and the backer behind it is Bitmain, the world’s largest mining machine manufacturer. This split created a cryptocurrency with the fourth highest market capitalization out of thin air.

BCH is a supporter of the large block expansion route and now supports blocks of up to 32MB. Bitcoin Cash remains Bitcoin’s most successful hard fork, and as of June 2023, it is the 28th largest cryptocurrency by market capitalization.

2. Bitcoin Nakamoto Satoshi BSV

On November 16, 2018, Australian businessman CSW (Craig Wright), who has always claimed to be Satoshi Nakamoto, initiated a split operation against BCH. Thus, a BCH fork chain called BSV (Bitcoin Satoshi Vision) was born. According to CSW, this chain means “Satoshi Nakamoto Vision.”

Similar to how BCH split from BTC back then, BCH’s split also represents a line dispute between Wu Jihan and CSW in the BCH camp: Wu Jihan advocated gradual improvement; while CSW called for a radical revolution — directly using the 128M superblock and “locking” the client in the 0.1 version during the Satoshi era.

3. Bitcoin Gold BTG

BTG was a hard fork in October 2017. It differs from Bitcoin in terms of the POW algorithm required by miners. The creators aim to resume GPU mining with this because they believe that the equipment and hardware required for mining has become too specialized.

The increasing difficulty of mining Bitcoin and the emergence of special purpose integrated circuit (ASIC) hardware created specifically for Bitcoin mining have made it almost impossible for ordinary people to participate in Bitcoin mining. BTG supporters believe this is not conducive to the security of Bitcoin.

BTG pioneered a pre-mining function and placed a certain amount of BTG directly into the team address, which later caused controversy: in the eyes of many investors, BTG became a typical case where the project party used the name of a hard fork to harvest chives.

Since August 1, 2017, BCH became the first hard fork project in Bitcoin history, and since then, there have been many acts of forking Bitcoin. According to statistics, in December 2018 alone, more than 10 Bitcoin fork projects were created. And according to https://forkdrop.io/的统计，这类型的分叉币多达78个. However, most of them are speculators and fraudsters who use the name of hard forks to take advantage of the opportunity to defraud.

^{As many as 78 forked coins [4]}

In addition to these two categories, there is another type of hard fork to experiment with Bitcoin. You might think of LTC, but in the future you’ll hear about LayerTwolabs, MainChain, and DriveChain.

An experimental hard fork in the LayerTwolabs program

This is a type of unavoidable hard fork, just like Monroe and the birth of Ethereum, just like the hard fork planned by LayerTwolabs.

Since the Bitcoin Core team and the BTC ecosystem are becoming increasingly conservative, and Bitcoin’s cybersecurity budget issues (Part1,Part 2) are critical, it is necessary to be extremely cautious about possible major changes. Bitcoin’s soft fork upgrades in recent years have only occurred in 2-3 years. BIP-300/301, which is supported by many community members, has been slow to be implemented, and the miner loyalty problem is becoming more and more obvious as halving approaches. Measures to resolve this issue must be accelerated. LayerTwolabs plans to hard fork Bitcoin within this year as an experiment and as a phased measure to find a solution to the problem.

However, the hard fork of the LayerTwolabs plan is also different from Monroe and Ethereum. The latter launched a new chain because their improvement ideas were not adopted by the Bitcoin Core team, while LayerTwolabs hoped to verify the viability and effectiveness of their DriveChain plan in the form of a hard fork, thereby persuading the Bitcoin Core team and opponents to upgrade the Bitcoin network to BIP-300/301 to achieve the expansion of the Bitcoin network and strengthen the security and utility of Bitcoin in the future.

BIP300 Miner Sentiment

https://activation.watch/bip/300

BIP300 supports decentralized sidechains (sidechains), such asEthSide orzSide , and evenlarge block (blocksize) sidechains . The development of BTC has become more competitive. Users may not trust BIP300, making it useless. Additionally, miners will be responsible for adding/removing sidechains, which they might find annoying. BIP300 doesn’t seem to hurt any other BTC use cases, so it probably should be activated.

New Species Drivechian Miner Sentiment

BTCV25+BIP118/118/300/301/345=? ^[5]

https://activation.watch/

BIP301 Miner Sentiment

https://activation.watch/bip/301

BMM is blindly merging mining to improve merger mining by removing the need for miners to run alternative chain software. BIP301 can be used by altcoins (such as namecoin) or Bip300 sidechain sidechains (called “Drivechains Drive Chain”). The BIP301 doesn’t seem to have any technical objections. MM joint mining has been in continuous use for over 10 years. On the other hand, there aren’t many technical reviews about the BIP301 yet. BIP301 doesn’t seem to hurt any other BTC use cases, so it should probably be activated.

LayerTwolabs hard forks are also different from BCH/BSV, etc. The hard fork of BCH/BSV is inconsistent with the direction of the Core team on the expansion path. Their route requires changes to the underlying Bitcoin code, and there is a trend of continuous centralization in the future, which has an impact on the security of the Bitcoin network. LayerTwolabs is an advocate of small blocks. DriveChain’s scaling solution does not require Bitcoin consensus-level code changes, and sidechain security issues will not affect the main chain. Opponents currently have doubts mainly about the safety of cross-chain assets, and how to ensure that miners do not commit evil when computing power is centralized. However, in the BIP-300 linkage mechanism, the miner’s fraudulent behavior is not only a short-sighted trade that puts one’s bottom at the end, but also an immoral and illegal act in broad daylight, so it is easy for honest participants to take action.

Over the years, the DriveChain community, with Paul Sztorc, FiatJAF and others at the core, has always strived to promote and popularize DriveChain, proposed a more optimized form of merged mining, BIP-301, designed 7 side chains with different functions, integrated miner and developer resources, and is about to boldly explore the future path of Bitcoin.

A hard fork is both division and growth

Having only one voice in a group is dangerous, and the consequences of standing still can be unbearable. A hard fork is a kind of division, but division is also a kind of growth, seeking opportunities from different paths. Bitcoin has always faced route problems. For Bitcoin supporters and fans, the hard fork experiment is a search for solutions rather than a breakdown.

To some extent, every new Bitcoin fork creates fertile ground for the development of the blockchain itself and cryptography as a whole, whether it’s an actual developer innovating or a fork that is just a narrative hype. As the most popular crypto project in the market, Bitcoin has always been the center of attraction for new and promising ideas relating to the use of its publicly available blockchain code in all directions. It has spawned various exciting and exciting cryptocurrencies and the emergence of blockchain applications such as GameFi, NFT, DeFi, Metaverse, etc.

DriveChain provides a simple, effective, and secure way to load these use cases into the Bitcoin network and address fundamental cybersecurity issues brought about by declining miner earnings. LayerTwolabs and the community will explore its effects.

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