Brief History of Bitcoin
Bitcoin was the first cryptocurrency, which was launched in 2009 by a mysterious developer, with a name “Satoshi Nakamoto.” Since the creation of Bitcoin, it has inspired thousands of other cryptocurrencies (generally called altcoins) and has gained an enormous acceptance across the world.
Though some altcoins have copied some aspects from the original concept of Satoshi, other altcoins also made significant development on the Bitcoin model. However, in some cases, some altcoins are just a copy of bitcoin and have the similar underlying program – but at the same time, they are a bit different from the original Bitcoin. In such cases, the bitcoin blockchain should undergo a procedure which is called “forking.”
- In forking process, Bitcoin blockchain divided itself into two distinct entities.
- Through forking, numerous cryptos with a similar name to Bitcoin were generated, including; bitcoin gold and bitcoin cash.
- It may be a bit difficult for a casual investor to differentiate amid these cryptos and to plan the dissimilar hard forks on a timeline.
What is Genesis Block?
- After Bitcoin was created, the first block was referred to as “Genesis Block.” It was mined on the Bitcoin blockchain by Satoshi.
- Satoshi made many changes to the Bitcoin network in this process and those changes have now become even more complex as the userbase of Bitcoin has fully-fledged.
- Not one can regulate when and how Bitcoin should upgrade, and this makes the entire process of changing/updating the system a little bit more complex.
- Even after the creation of Genesis Block, a number of hard forks still existed.
- Hard fork included the upgrading of software executing bitcoin and its mining processes.
- Once a software is upgraded by a user, that software version discards all other transaction from older software and generates a new branch of the bitcoin blockchain.
- However, users who use the older software are still going to continue to process transactions, henceforth, there’d be a similar set of transactions going on across two different Blockchains.
- This is one of the most notable Bitcoin hard forks.
- In 2014, Mike Hearn made the software for integrating some of the new features that he proposed.
- At that time, Bitcoin allowed only 7 transactions-per-second.
- Bitcoin XT was intended to allow 24 transactions-per-second.
- Bitcoin XT primarily experienced a great success after its launch, with almost 1,000 nodes running its software (back in 2015).
- However, just after few months, users lost interest in Bitcoin XT, making it ‘doomed to die.’
- Even though Bitcoin XT is officially available today, but it has visibly tumbled out of the errand of crypto community.
- After Bitcoin XT failed, few cryptocurrency community members demanded an increase in the block sizes.
To accomplish this goal, Bitcoin Classic was created in 2016.
- Unlike Bitcoin XT, Bitcoin Classic intended to raise block size to only 2 megabytes.
- Just like Bitcoin XT, Bitcoin Classic also saw initial interest with almost 2,000 nodes for few months in 2016.
- Bitcoin Classic still exists today and has gained a strong support from some developers.
- In 2015, Bitcoin core developer, Peter Wuille introduced the idea of SegWit (Segregated Witness).
- SegWit aims to reduce the size of all Bitcoin transactions, letting more transactions to come off at the same time.
- However, SegWit was officially a soft fork and might have assisted in prompting hard forks after it was initially proposed.
- Some community users and developers decided to introduce a hard fork in response to SegWit, as well as to evade the procedure-updates.
- This, at the same time led to the creation of Bitcoin Cash.
- Bitcoin Cash detached from the main blockchain in August 2017 – when Bitcoin transactions were excluded by Bitcoin Cash wallets.
- Up till now, Bitcoin Cash is the most effective and successful hard fork of Bitcoin.
- Bitcoin Cash is also the 4th largest cryptocurrency by market cap and allows blocks of 8 megabytes.
- After the creation of Bitcoin Cash, Bitcoin Gold was created.
- The creators of Bitcoin Gold intended to evoke the mining functionality with elementary GPU (Graphics Processing Units) since they experienced that mining became also particular – in terms of hardware necessities.
- Post-mine is an exclusive feature of the Bitcoin Gold and a procedure through which the developers mined 100,000 coins.
- In general, Bitcoin Gold follows the basic concepts of Bitcoin.
- Also, it is different in terms of ‘proof-of-work algorithm.’
As Bitcoin has been forked quite a few times within few years, there is a possibility that Bitcoin would still continuously experience both soft forks and hard forks in the future.