Bitcoin remains the largest cryptocurrency by market cap to date, and it doesn’t look like that’s changing anytime soon. Bitcoin is the original cryptocurrency – launched in 2008 by Satoshi Nakamoto in response to the global financial crisis at the time. Bitcoin’s had a pretty illustrious last decade, and its legacy has spawned an entire crypto-asset industry. A crypto-asset industry that includes coins that are technically forks of the Bitcoin blockchain.
So, what’s the deal with software forks? We’ll be taking a look at what exactly a software fork is, and which coins have utilized Bitcoin’s software over the years.
What is a software fork?
What’s the deal with software forks? A software fork, or fork, is when a blockchain that works with a central set of protocols and user consensus is split. In software engineering, a project fork occurs when developers take a copy of the source code from one software package and start developing it independently, creating a unique and separate piece of software. This is different from a soft fork or hard fork, which are technically upgrades of the original blockchain software.
Biggest software forks in Bitcoin history
Let’s take a look at the biggest software forks in Bitcoin history:
- Litecoin: Litecoin is technically a software fork of Bitcoin, because the project code was copied from Bitcoin and later modified. The team at Litecoin are pretty transparent, and even include this information on their Github page. Litecoin was founded by Charlie Lee in 2011, and differs from Bitcoin in a number of ways. Firstly, Litecoin’s total supply sits at 84 million LTC as opposed to Bitcoin’s 21 million total supply. The goal of Litecoin is to make mining more democratic – allowing users to mine without the need for outlandish equipment. Litecoin also aims to solve Bitcoin’s problems with transaction speeds and scalability.
- Dash: According to eToro, Dash was built in 2014 by developer Evan Duffield. The blockchain was originally called Zcash. Duffield decided to fork the Litecoin blockchain to provide additional features that he thought were missing from the original network (like lower transaction fees). Litecoin was originally a fork of Bitcoin. The Dash protocol has two tiers – the first is similar to Bitcoin and utilizes a proof-of-work consensus algorithm. The second uses a proof-of-service algorithm – a kind of scoring system that Dash uses to determine whether or not its nodes are operating in good faith.
- PeerCoin: Peercoin is a fork of an older version of Bitcoin. Also known as PPCoin or PPC, it’s a peer-to-peer cryptocurrency that uses both proof-of-stake and proof-of-work consensus algorithms. Peercoin is based on a paper from Scott Nadal and Sunny King, which was released in August 2012. King is also the founder of Primecoin. Peercoin uses the same mining algorithm as Bitcoin, known as SHA-256.
The IRS has released rules detailing the taxation of hardforks and airdrops of cryptocurrencies, and they aren’t pretty. Learn more in our blog. https://t.co/qhnPYWrS0S #cryptocurrency #hardforks #taxation pic.twitter.com/2z5ZQeO54r
— WFFA CPA (@wffacpa) November 5, 2019
If you’re looking to trade Litecoin (LTC), Dash (DASH), or Peercoin (PPC), you can find them on social trading platforms like eToro, and exchanges.
Software forks make the crypto world go round
So, what’s the deal with software forks? They’re pretty important within the crypto asset space. Software forks have resulted in some of the most revolutionary and popular coins on the market, and there’s no shortage of them out there.
