How many Bitcoin versions are there?
There are FIVE different versions of Bitcoin, at this time, with the main one being, by far, Bitcoin Core (BTC). It uses free and open software which derives directly from the original development by Satoshi Nakamoto. When installed on a computer, the Bitcoin Core creates a node of the Bitcoin network, with its wallet and the capability to send and receive money. The word core is therefore used, in this case, to distinguish this portion of software the wider Bitcoin network and its protocols.
When Satoshi Nakamoto abandoned the Bitcoin project in 2011, he left behind a community of developers tasked with the duty of evolving the platform. Any changes would be possible only if accepted by the majority of the network players and developers. In such a way, no single individual or group would have been able to twist the system to their benefit.
Like Satoshi Nakamoto, all initial developers contributed to the project for free, but over time economic factors entered the picture and it opened the door to the in-infighting and the splitting of different factions.
Hal Finney was the initial key opinion leader and contributor to the development project. He was ill and was soon replaced by Gavin Andresen, from Massachusetts, who also participated in starting the Bitcoin Foundation in 2012. It was an organization created precisely with the purpose of collecting funding for the development effort. The organization did manage to collect money but was disbanded in 2015 for insolvency. In the meantime, Wladimir J. van der Laan, from Holland, replaced Andresen as lead developer In April 2014. Today the development effort is carried forward by volunteers as well as corporations that contribute to the open-source code.
Andresen initially tried to facilitate the expansion of Bitcoin Core as a whole but flip-flopped supporting antagonist projects already in 2016 and was eventually banned from changing the BTC software that same year. In 2020 he announced his support for a completely different and competitive environment: Ethereum.
Gavin’s main complaint was that BTC didn’t evolve and change fast enough to meet its scalability challenges (the ability to process many more transactions per minute). Yet this is considered to be the actual strength of Bitcoin Core: a very conservative development approach that follows the original formula as closely as possible. Stability fosters trust and it translates into the huge market valuation of BTC today.
Litecoin versus Bitcoin Core
The limit of processing only about 3,500 transactions every 10 minutes generated infighting in the Bitcoin development group fairly rapidly. Some of them parted their way, evolving their version of Bitcoin. Such a mechanism is called “hard fork,” and it is similar to the forking of a railway. One train arrives at the hard fork and it splits into two separate convoys, each following a separate and diverging path.
The first departure from the original Bitcoin is called Litecoin, or LTC. It was created as a friendly hard fork of the original project on October 13th, 2011. Litecoin is a complement to BTC for small payments. It uses the same software, but it validates a block in 2.5 minutes instead of 10 minutes, like BTC. Furthermore, it allows the production of 84 million coins over its lifetime, versus the 21 million allowed for BTC. It is today the 6th cryptocurrency in value. His creator, Charlee Lee, is still active in developing it.
Bitcoin Cash versus BTC
Bitcoin Cash is an alternative version developed in August 2017. It aims at reducing transaction costs by increasing the amount of information processed in a single block. By block we mean the digital container hosting all the information related to multiple transactions approved in one cycle. Bitcoin Cash, or BCH, uses blocks with a size of 8 MB versus the 1 MB allowed by Bitcoin Core. And it allows for a maximum block size of 32 MB. It can record more transactions per minute, but it reduces security and introduces more centralization of control. Furthermore, it creates a huge database of previous transactions limiting the ability to maintain a truly decentralized network. Decentralization works when many people can participate independently in operating the network with their computer or smartphone.
BCH tried immediately to gain popularity as a complete alternative to BTC but never succeeded. Today it occupies the 4th position in the list of top cryptocurrencies. One of its key developers, Amaury Séchet, claimed he was the original Satoshi Nakamoto, but he was never able to prove it. Another key developer, the Californian Roger Ver, strongly supported the original Bitcoin. He was one of the original five founders of the Bitcoin Foundation. Later he turned to Bitcoin Cash and developing a whole series of Bitcoin and crypto-related startups.
Bitcoin Gold versus BTC
On October 24, 2017, another hard fork took place on the main Bitcoin Core blockchain. The name of the new controversial project was Bitcoin Gold which aimed at facilitating the mining (minting) of new Bitcoins. The hard fork involved the issuance of tokens (money) to the exclusive benefit of the group supposed to develop. The event lowered the trust factor in the Bitcoin community. Today Bitcoin Gold (BTG) is 40th in the list of the overall market value of major cryptocurrencies. It is the worst-performing Bitcoin hard fork and almost half of its tokens are held by just one individual.
Bitcoin Satoshi Vision versus BCH
In August 2018 some Bitcoin Cash developers launched a hard fork called Bitcoin Satoshi Vision or BSV. It uses an even bigger block size, 128 MB, in an attempt to provide a global payment system. More recently, they seem to be willing to go back to the original block size of 1 MB. One of the founders of BVS, the Australian Craig Wright, also claims to be Satoshi himself. He didn’t gain much credibility and is involved in troubling judiciary problems. Like BCH, also BSV failed to replace BTC and today is 5th in the list of cryptocurrencies per value.