A blockchain is a valuable thing. It is the representation of immutable data – a public record not hidden away from the view of the public. Traditional blockchains are secured with “proof of work”, which means the amount of cycles spent by computers around the global network backing a given blockchain.
Blockchains benefit by there being multiple, potentially millions or more, copies, all of which agree with each other. Two copies of a blockchain must agree with each other or they are either both invalid or separately valid.
When the latter case happens, and a disagreement is found, a “hard fork” takes place. Hard forks can happen every 10 minutes if the system were more dysfunctional.
Essentially, a hard fork means that there are now multiple, competing, conflicting versions of history. In one blockchain, this set of transactions took place, while in the other it never did. Usually hard forks are not a big deal. The network will have a clearly defined winner and that is the chain that will be mined.
However, occasionally hard forks happen in which enough people support the minority chain that it continues on.
In some cases, this is done very intentionally, while in others, a disagreement is reached and rather than find some middle ground, the two blockchains go their separate ways. This is what happened with Ethereum Classic.
hack enabled someone to steal millions of Ether and rather than allow that to stand, the Ethereum community hard forked to make these transactions null and void. Ultimately a minority did not agree that this should be done and continued mining the original Ethereum, renaming it Ethereum Classic. Ethereum Classic
still exists today.
After a long scaling debate in the Bitcoin community, it became clear that there were two very different philosophical approaches emerging. One side believed that simple on-chain scaling is the way forward — that the maximum size of each block in the Bitcoin blockchain should first be increased before other discussions of scaling solutions made any sense.
When Bitcoin developers applied the patch resulting from Bitcoin Improvement Proposal 91, which instructed the network to begin rejecting blocks created by nodes which do not support Segregated Witness, people with the “on-chain” view of scaling decided to hard fork the network, immediately increasing the maximum size of blocks to 8MB from 2MB.
For a time, there was speculation that the majority of the Bitcoin mining network might support the new chain as opposed to Bitcoin, but this never took place. There was a degree of network instability as miners algorithmically switched between networks based on the value of Bitcoin Cash.
Most importantly for the user, Bitcoin Cash meant free money for Bitcoin holders. Yep, that’s right – all the people who had money on the Bitcoin blockchain also had money on the Bitcoin Cash blockchain. Since there was an active community developing around Bitcoin Cash, most exchanges made it possible, if not always easy, to convert Bitcoin Cash to Bitcoin or fiat currencies.
Bitcoin Gold has exactly the same properties as Bitcoin Cash, in that people who held Bitcoin before its launch also held Bitcoin Gold, but rather than forking due to the scalability debate, Bitcoin Gold was created with the purpose of changing the way Bitcoin is mined.
Bitcoin Gold’s primary difference is that it uses Equihash as opposed to SHA256 for mining, which means that the amount of available dedicated hardware is lower and therefore “centralization” of Bitcoin mining — a situation in which only a few interests are in control of Bitcoin mining — is undone.
For the most part, Bitcoin Gold has not been very successful when compared to Bitcoin Cash, which has maintained a reasonably high price in relation to Bitcoin and continues to see new services launched on it.
Bitcoin Private has the Bitcoin blockchain in common with Bitcoin, Bitcoin Cash, and Bitcoin Gold, but it also has the blockchain history of Zcash. The purpose of Bitcoin Private is to bring the privacy and protocol improvements created in Zcash to the Bitcoin blockchain.
If you held Zcash and Bitcoin before the launch of Bitcoin private, you get rewarded proportionally for both. There is no special process for claiming your currency, and the developers are not “in control” of you receiving it. The nature of using the Bitcoin blockchain is that its previous holders must be respected for any fork to have legitimacy.
So, which one is Bitcoin?
An unfortunate potential side effect of all this forking around is that people just coming into the cryptocurrency scene might have a hard time understanding which one is the one they’ve heard so much about.
While certain proponents in any single community will always try to spell it as the “one true coin,” the only
Bitcoin is the one with the original blockchain and the current consensus rules in place.
Bitcoin Cash and the others have as much right to the word “Bitcoin” as Bitcoin itself does, but simply invoking it does not make these products into bitcoins.