Guide

What are forks in the cryptocurrency world?

With the advent of the distributed ledger technology came a host of terms and practices that only those specializing in blockchain understand what it means and where it is applied. Ever heard of forks in the cryptocurrency world?

For example, bitcoin was the first decentralized virtual currency to be in existence using the distributed ledger technology also known as blockchain.

Blockchain, as the name suggests is made up of blocks of information placed in a chronological order depending on their times of being verified. For a block to be added on the chain, a set of rules and protocols must be followed and agreed upon.

A fork means that the blockchain has been split into two.

Some of the things that would necessitate the splitting/forking of a blockchain are;

If the base rules and protocols the blockchain currently uses needs to be changed e.g to increase the block size or to enhance the blockchain’s features.

When these changes are implemented, they cannot be reverted. They are permanent.

Altering blockchain protocols will result in either a soft or a hard fork.

Soft fork

This kind of fork occurs when the blockchain is upgraded and the upgraded version is still compatible with the older version. After the upgrade, all those with the old version of the blockchain will still be able to access new blocks although they will not enjoy the added features.

If they are miners, their attempt to verify a block will result in an error. To avoid this, all those on the old blockchain need to upgrade to the improved version.

Hard forks

This is the opposite of a soft fork. When the blockchain is upgraded, the split creates an entirely new blockchain with its own rules and protocols which are not backward compatible. The two chains will continue to exist with activities on one not affecting activities on the other.

Last words

Forks in the cryptocurrency world e.g hard forks, cannot be avoided as the community behind any blockchain project is the one which decides whether to create another chain by splitting the current chain.

As the distributed ledger technology advance day after day, soft forks will be needed to help blockchains evolve with the needs.

coinmag

Philip is an experienced blogger keen on staying updated with trends and news surrounding the blockchain and Bitcoin space. With several years of freelance experience in various industries, Philip brings his knowledge and experience into the crypto space.

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