Usually, trading Bitcoin or crypto currencies is said to be only about knowing prices and what is a blockchain. But, regularly, many events can severely alter the crypto ecosystem. These situations can make you win or lose money. One of the latest news that brought some turmoil into the Bitcoin environment is the creation of Bitcoin2X by forking Bitcoin. But, to understand Bitcoin2X, we need to understand what a fork is.
A fork is a change in how the blockchain works, it could be a change in its transaction speed, its storage capability, the mining method, etc.
A fork exists in two forms: A soft fork, which is one that alters the blockchain, albeit in a not-very-noticeable way. And a hard fork, which is an alteration so significant it causes the blockchain to split into two, usually generating a new cryptocurrency while maintaining the old one under the previous rules.
Bitcoin2X is the product of trying to do a hard for on the Bitcoin blockchain. The plan was to segment the original blockchain into Bitcoin Legacy and Bitcoin2X,
But, to achieve a more in-depth understanding of what Bitcoin2X is and why it was suggested as an option, it is important to point out the most relevant things about it.
1. It Offers Twice the Transactions Per block.
The creation of Bitcoin2X comes as a consequence of the perceived issues on Bitcoin scaling. During the times when Bitcoin was still an obscure concept, transactions were quick. However, with the fast popularization of the cryptocurrency, transactions have slowed down.
The reason for the slowdown is the block size which is 1MB. That size limits the number of operations that can be stored in it before a new block is needed.
Bitcoin2X, as the name suggests, offers twice the storage capability at 2MB per block. That was going to help significantly in speeding up the transactions as Bitcoin grew in popularity.
2. Bitcoin Users Get Bitcoin2X Equal to Their BTC.
Whenever a blockchain splits, both the old and the new one networks keeps the history of every transaction made before the split. That means that every BTC owner will get the same amount of Bitcoin2X pretty much for free. That is what happened when Bitcoin and Bitcoin Cash formed.
However, once this happens, both blockchains will go off in different directions and you won't earn BTC for every Bitcoin2X or vice versa.
3. It Is Potentially Less Secure to Certain Attacks.
For all the positives, there is a noticeable problem with Bitcoin2X. This issue has been pointed out in almost every article, and it relates to replay attacks.
Replay attacks happen whenever a transaction in one blockchain is copied into another blockchain. This allows for multiple transactions while only spending the amount on the first one. And that leads to double counting, which is the most significant problem any digital currency face.
The problem of replay attacks and double counting is that allows users to trade for much more than what they have while leaving the recipients with "ghost" tokens which only show up as a number, but doesn't exist.
This issue led to a lack of consensus among the major Bitcoin players. And that is why after a lot of debate, the idea was cancelled. But, this is not the end of Bitcoin2X. That said, the people behind Bitcoin2X will keep working on the fork with the hopes of a higher consensus to be reached in the future.