Bitcoin, Bitcoin Cash, Gold, & the Fork … (or Mr. Makamoto: where Are You?)

The jury is still out on whether Satoshi Nakamoto is a real person or a group of people. What has been confirmed is that he (she/they) have the global financial world in the midst of an upheaval not known since the first clay coin made its way from one hand into another. It began in 2008 when Nakamoto published an academic paper on cryptography and the creation of a peer-to-peer digital currency system. Three months later the first version of Bitcoin was launched.

History

The first Bitcoin exchange was established in 2009; and by 2011, Nakamoto had disappeared, leaving the world to wonder who he/she/it/they is.

When introduced, bitcoins traded for 1,309 to the US dollar. With no more than 21 million to be produced ever (this is written into its algorithm and cannot be altered), their value was soon edging towards the $20,000 mark per coin. Presently, volatility has subsided and Bitcoin value is in the is the most highly capitalized and traded of all cryptocurrencies.

Divergence

Soon after the massive upheaval in Bitcoin’s value, it was becoming expensive and next to useless as a useable currency. In 2017, a hard fork resulted in the establishment of Bitcoin Cash – an identical product but with a new version of the original software that enabled executing a larger number of transactions at any time. The intention was to create a cheaper, quicker-to verify and more reliable payment system. The size of each block in the blockchain was increased from 1 mb to 32, enabling more transactions within a single block, and higher incentive for miners. 

Coincidentally, Bitcoin Gold was also created as another fork from Bicoin, whose intention was quite different from that of Bitcoin Cash. As the number of bitcoins to be mined drops, the mining process becomes more computer intensive and more expensive, leaving the field in the hand of large corporations, rather than the average computer geek, for whom the mining process was created. Mining Bitcoin Gold does not require specialized computer components, called chipsets, but can be undertaken with a simple Graphic Processing Unit (the graphics card installed on your computer so you’ll be able to play games requiring high-quality graphics).

What is a Fork?

A fork is basically the splitting of a cryptocurrency into two. A soft fork is when only one of the two blockchains prevails; a hard fork is when the two continue to exist independently. A major change in the blockchain protocol invalidates all previous transactions – this with the consensus of all coin holders.

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