Bitcoin Cash, Litecoin, And Ethereum Classic – What Are These Crypto Spin-Offs?

Outside of the cryptocurrency world, the names behind these coins would have meant that they belong to the same brand as the originals.

However, brands work a bit similar in the digital asset industry, where most projects feature an open-source code without copyrights or paid licenses to protect their products or services from copycats.

Instead, developers can copy a project’s code, paste it into theirs, and customize it to fit their preferences to create a fork.

Forks of Cryptos

In other cases, spin-off coins are created after a hard fork – a blockchain upgrade that is not compatible with the previous versions of the software – goes south, which leads to a split in both the community and the chain.

And, in this article, we will explore the top three altcoin forks Bitcoin Cash, Litecoin, and Ethereum Classic.

Bitcoin Cash

Currently ranks as the 15th largest cryptocurrency by market capitalization, Bitcoin Cash is an altcoin that shares a very similar codebase with Bitcoin.

Unlike most BTC spinoffs that have disappeared soon after their launch, BCH managed to be among the top 20 coins with a strong community that backs the project.

Born in the aftermath of the infamous Bitcoin scalability debate, Bitcoin Cash came into existence on August 1, 2017, soon after the BTC community failed to agree unanimously on the proposed Segregated Witness (SegWit) upgrade that introduced more efficient data storage for the network.

While those in support of SegWit sought to improve Bitcoin’s throughput via second-layer solutions like the Lightning Network, the opposition wanted to increase the network’s block size limit from 1 MB which would increase the centralization but allow the main blockchain to scale more efficiently.

Due to the disagreement, while SegWit supporters stayed with the Bitcoin blockchain we know today, those who opposed the upgrade forked the BTC chain to create Bitcoin Cash, which features an increased block size limit (initially, 8 MB that was extended to 32 MB later).

With the increased block size limit, Bitcoin Cash features much better on-chain scalability than Bitcoin, which is designed to encourage BCH to be utilized for everyday payments instead of holding it as a store of value.

Litecoin

Launched in October 2011 by former Google employee and Coinbase engineering director Charlie Lee, Litecoin is one of the earliest Bitcoin spinoffs and the 16th coin by market cap.

Its main differences from Bitcoin include:

  • 2.5-minute block times instead of 10 minutes
  • Extended maximum supply (84 million coins)
  • Different mining algorithm (scrypt)
  • Minor modifications in the graphical user interface (GUI)

In overall, Litecoin transactions confirm faster than in the Bitcoin network and feature an increased supply. At the same time, the cryptocurrency is more complex to mine with specialized equipment (ASICs) due to its scrypt algorithm.

However, unlike in the case of Bitcoin Cash, Litecoin doesn’t see Bitcoin as a competitor blockchain.

Instead, it’s the unofficial canary network of BTC, serving as the chain to test future upgrades before they are rolled out for Bitcoin.

Ethereum Classic

Like BCH, Ethereum Classic was born out of a major disagreement in the cryptocurrency community that currently holds the top 20th rank among all digital assets.

Launched on July 20, 2016, ETC is the coin of the “untouched” Ethereum blockchain. After the infamous DAO hack, ETH developers changed the blockchain’s history to recover the $50 million funds that were stolen by the attacker via a hard fork.

While Ethereum supporters have agreed to launch a new chain to prevent the consequences of the hack, a part of the community rejected the upgrade and remained with the old blockchain, arguing that “code is law,” and the distributed ledger should remain immutable.

After the split, the prior community created today’s Ethereum while the latter blockchain has become Ethereum Classic.

In addition to the above-mentioned ideological difference, unlike ETH, ETC features a maximum supply of 210.7 million coins.

Summing Up

While the original cryptocurrencies – Bitcoin and Ethereum – feature much higher market caps and popularity, Bitcoin Cash, Ethereum Classic, and Litecoin are all spin-off cryptocurrencies that have strong communities and achieved to remain among the top 20 coins.

And, despite the similarities in code and some controversial events in their history, these altcoin forks provide value for the industry by solving different problems than the original digital assets.

Leave a Reply

Your email address will not be published.

Related Articles
Read More

Crypto Vaults – How Do They Work And Are They Safe?

Storing CryptoPeople store their money in different places to suit their various needs. In fact, that is why there are distinct classes of bank accounts (checking accounts, saving accounts), as well as several types of denominations, e.g., American paper currency come in seven denominations: $1,...
Read More

Dubai Gets A New School That Accepts Crypto Payments

Following the recent adoption of initial crypto regulations, Dubai is set to open the first school that accepts crypto payments. According to recent reports, Dubai will soon see the opening of the first school in the Middle East that will accept cryptocurrency payments, allowing the...
Total
0
Share