The term ‘hard fork’ hit global headlines on August 1 when Bitcoin, the original mainstream cryptocurrency, was split to create Bitcoin Cash. Up to that point Bitcoin’s critics had been grumbling for a couple of years that by resisting change and refusing to update the underlying code the pioneering crypto had been unable to deal effectively with the recent surge of popularity.
In simple terms, Bitcoin transactions are finalised when a ‘block’ is added to the blockchain database that underpins it. And many Bitcoin miners were disgruntled, believing that being restricted to 1MB per 10 minutes was simply too slow, hence the hard fork.
Wry commentators called it ‘Bitexit’ and although the market didn’t know what to make of the technical manoeuvre – initially at least – it triggered the most sensational month in crypto history.
Four weeks after the hard fork Bitcoin hit a record high of over $4,700 – up almost 70 percent for the month – and other cryptos enjoyed similar success.
September proved to be a more chastening month, thanks to market corrections and, well, FUD, as it is known in the business. (It’s an acronym for fear, uncertainty, and doubt, in case you were wondering.)
No sooner have we come up for air after the Bitcoin hard fork than another one is bobbing towards us on the horizon. Ethereum, the second-largest cryptocurrency in the world, by market capitalisation, is expected to hard fork around October 17.
The move had been hinted at by Ethereum founder Vitalik Buterin who visited eToro’s office a few weeks ago, and on September 19 news filtered through that ‘Byzantium’ – the first of two phases of the cryptocurrency’s long-anticipated ‘Metropolis’ upgrade – had launched on testnet, an alternative blockchain used solely for trying out the validity of new tokens.
Ethereum founder Vitalik Buterin (Right) with eToro CEO Yoni Assia
Following the hard fork, which took place on the Ethereum testing environment Ropsten, there began an intensive three-week trial period designed to weed out any issues before the fork occurs on the main Ethereum blockchain. During this time nine Ethereum improvement protocols (EIPs) will be introduced in the Byzantium hard fork.
What will the hard fork achieve? The primary aim is that the code updates should boost the functionality of the network. Additionally, any potential attacks will be reduced, and also it is hoped that this will lay the foundations for a novel cryptography on the Ethereum platform.
Mr Buterin, a 23-year-old Russian-Canadian programmer and co-founder of Bitcoin Magazine, hinted at the San Francisco-based TechCrunch Disrupt 2017 in early September that the Ethereum platform has the capacity to develop much of what is known about data and security. Further, he teased that it might be possible for Ethereum to have the transactional oomph of Visa, and more, by the end of 2019.
“Bitcoin is processing a bit less than three transactions per second,” he said, making reference to the key reason the Bitcoin hard fork took place. “Ethereum is doing five a second. Uber gives 12 rides a second. It will take a couple of years for the [Ethereum] Blockchain to replace Visa.”
If that lofty goal is to be met, October’s hard fork will be a significant step towards it – and that is good news for all crypto fans.
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