<aside> <img src="/icons/flash_gray.svg" alt="/icons/flash_gray.svg" width="40px" /> The Bitcoin Rabbit Hole: 8/10 ⚡ Open source software like Bitcoin can be forked and modified by anyone - welcome to the world of altcoins!
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In the world of open source software, anyone can copy someone’s code, make changes to it and release it themselves as a new version. Like a fork in the road, “forking code” takes software in a new direction.
This practice of forking software encourages rapid evolution and innovation in software. It’s also one of the reasons the crypto industry is going so many directions at once. There are a few different types of forks:
Nodes are not required to upgrade when a new version of the software is released. Major software upgrades may result in some nodes being incompatible with one another thus causing a fork in the network.
There are two types of upgrade forks:
In Bitcoin, hard forks are avoided at all costs as they are seen as to risky. Other cryptocurrencies such as Monero and Ethereum schedule their hard forks and fork regularly.
Now we get into the fun stuff! Project forks is how we ended up with the first altcoins (aka any cryptocurrency which isn’t Bitcoin). Most hardcore bitcoiners call them shitcoins 😉
For example, in 2011 Charlie Lee downloaded a copy of the Bitcoin source code, made a few changes including: shortening the average block time from 10 minutes to 2.5 minutes, increased the supply from 21 million to 84 million coins, etc. and re-launched it as Litecoin!
Litecoin was pitched as a faster Bitcoin, the silver to Bitcoin’s gold. Litecoin’s blockchain started from scratch and Charlie had to attract an entirely new network of miners to participate.
Not every altcoin is a project fork. Ethereum for example was coded from scratch but incorporates similar Bitcoin concepts like blockchain and Nakamoto Consensus.