WHAT IS A FORK?

Cryptocurrencies like Bitcoin or Ethereum are powered by decentralized, open software that anyone can contribute to, called a blockchain. They are called blockchain because they are literally made up of blocks of data. It is a specific type of database. Different types of information can be stored on a blockchain but the most common use so far has been as a ledger for transactions.

A fork happens whenever a community makes a change to the blockchains protocol or basic set of rules. When this happens, the chain splits — producing a second blockchain that shares all of its history with the original, but is headed off in a new direction.

Important to know that most digital currencies have independent development teams responsible for changes and improvements to the network, so a fork happens to make a cryptocurrency more secure or add other features. You must vary soft fork and hard fork.

Soft fork – is a software upgrade for the blockchain. As long as it‘s adopted by all users, it becomes a currency’s new sets of standard. Soft forks have been used to bring new features or functions, typically at the programming level.

Hard fork happens when the code changes so much the new version is no longer backward-compatible with earlier blocks. Here the blockchain splits in two: the original blockchain and new version that follows the new set of rules. This creates an entirely new cryptocurrency – and is the source of many well-known coins. For example, cryptocurrencies like Bitcoin Cash and Bitcoin Gold evolved out of the original Bitcoin blockchain via hard fork.

There are a number of reasons why developers may implement a hard fork, such as correcting important security risks found in older versions of the software, to add new functionality, or to reverse transactions.

Soft fork and hard fork are essentially the same in the sense that when a cryptocurrency platforms existing code is charged, an old version remains on the network while the new version is created.

With a soft fork, only one blockchain will remain valid as users adopt the update. Whereas with a hard fork, both the old and new blockchains exist side by side and this means that the software must be updated to work by the new rules. Both of them create a split, but a hard fork creates two blockchains, a soft fork is meant to result in one.

Important to know that almost all users and developers call for a hard fork, even when a soft fork seems like it could do the job. Reconsideration of the blocks in a blockchain requires a tremendous amount of computing power, but the privacy gained from a hard fork makes more sense than using a soft fork.

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