Bitcoin is having an identity crisis

Bitcoin was built on the sort of open-source ethos that has driven generations of geeks. But the same principles it celebrates-a decentralized network of contributors, a transparent code base-are allowing competitors to flourish. The Bitcoin faithful aren't so sure that's a good thing.

Two high-profile Bitcoin developers, Gavin Andresen and Mike Hearn, released an alternative version of Bitcoin over the weekend. In software parlance, this kind of offshoot is called a "fork." Hearn acknowledged in a blog post that not everyone is thrilled with the endeavor. "The community is divided," he wrote. "Such a fork has never happened before."

Actually, forking is a pretty common occurrence in software. After Google created Android, which has become the most popular smartphone operating system in the world, Amazon.com, Nokia, and other device manufacturers created their own versions, partly to differentiate their products. Google allows for some modifications to Android but tries to discourage drastic changes by withholding its app store from incompatible devices. Call it semi-open source. Many hugely successful programs started as forks, including the blogging platform WordPress and WebKit, which powers some of today's most popular Web browsers.

But breaking off from an existing group of contributors to create a competing product "is a practice that is considered as a last resort," according to a research report examining several hundred instances of forking. "Our investigation shows, among other results, that forks occur in every software domain, that they have become more frequent in recent years, and that very few forks merge with the original project." The study found that nearly 44 percent of forks were successful; in nearly 30 percent of cases, the original software was discontinued, while 14 percent of the forks were eventually killed off. That's a solid track record.

The new software, called Bitcoin XT, has much less support than the original, but it's gaining traction quickly. It already accounts for 8.4 percent of computers running Bitcoin software, according to Bitcoin tracker XTnodes. The price of Bitcoin dipped slightly after Bitcoin XT's debut, perhaps reflecting concern that an alternative could hurt Bitcoin's value.

Many Bitcoin supporters are opposed to an offshoot version for the same reasons that Linux and Android heads have voiced objections to similar projects in the past: They split the developer community, meaning fewer people are able to work on each version. Many forks also become incompatible with their predecessors. That could create unnecessary barriers for people with different currencies to exchange money.

Despite the fervor in the Bitcoin community, the odds are against Bitcoin XT. "This is not the first attempt to create a better Bitcoin, but I believe Bitcoin has such critical mass of resources devoted to it that it is unlikely anybody would abandon it for an incremental improvement,"says Gil Luria, an analyst at Wedbush Securities. "None has gotten much traction."

If anything, some friendly competition could be good for Bitcoin. "Forking can serve as a catalyst for innovation while simultaneously promoting better quality software through natural selection," according to a 2013 research paper.