The Fork In The… Chain? What the Bitcoin Fork Really Means.

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The Fork In The… Chain? What the Bitcoin Fork Really Means.

ALL ABOUT BITCOIN FORK

Any digital currency or cryptocurrency fan who is alive and can spell “bitcoin” must be wondering what all the buzz about “forks” is about.


And no, it is not the kind of fork you use to stuff your stomach with good veggies at the dining table, the fork in question is one that occurs within the blockchain setup. It is a technical phenomenon that occurs in the event of various participants needing to come together and agree on common rules.

Let’s try that in simple terms, a fork is an occurrence when a blockchain splits into two prospective paths going forward. This might be with regards to the transaction history of a network, or the uprising of a new rule that comes to play when deciding on which transactions are valid or not. Hence, those blockchain users always must forgo one choice for the other.

The conundrum doesn’t stop there because there are several types of these forks, and experts are still getting a hang of this stuff. Some forks get resolved without any vigorous intervention, but some others do not. They seem to be fueled by severe cracks within a community of like minds. Sometimes, this is just the perfect recipe for a network to split out permanently, and this is how numerous blockchain histories and currencies are created.

The several types of forks and the severity of their impact has always been a topic of back and forth arguments since the generation is still getting used to the phenomenon. So, here’s a quick rundown on the various kinds of fork and how they work.

You should know that forks already have a home in bitcoins. As spin-offs from distributed consensus, forks ensue whenever two miners discover a block at approximately the same time. This is resolved by adding subsequent blocks to make one long chain, while the other block gets dumped like a bad habit within the network. Forks do also occur by intentional actions, like when a developer seeks to switch up the rules that govern how software decide if a transaction is valid or not.

A block containing invalid transactions is duly dumped by the network, and the miner who discovered that block is bestowed with the unfortunate events of losing out on the block reward. This is why miners go through everything possible to mine just valid blocks and capitalize on the longest chain.

So, here we go with the type of forks:

Hard fork

A hard fork occurs when a software upgrade doesn’t leave any room for compatibility with the older version of the software. It is okay if you see hard fork as a utilization of the new rules. For example, a rule that allows block size to go from 1MB to 2MB is going to require a hard fork.

What really happens?

Nodes that stay on the outdated version of the software will not function since the new software will display new transactions to be invalid. The solution here is obvious, upgrade all nodes within the network to the new software to continue mining valid blocks.

What can possibly go wrong?

Problems may arise when any sort of political impasse which requires all or a portion of the community become adamant about dumping the old rules. This is a problem because the hash rate or network computing factor is a wild goose chase. All that matters should be for the data to have value, and this just means that miners still desire to mine chains and developers still intend to support the movement.
The case of Ethereum DAO hard fork was a perfect example of what could happen within a hard fork setup. The platform now operates two blockchains using diverse versions of the Ethereum software: the ethereum and ethereum classic, all governed by distinct set of rules.

Soft fork

On the flipside of the coin, a soft fork situation occurs when there comes a backward change that is done to confirm compatibility. From the hard fork example, consider 1MB of blocks being allowed on the older software and the newer software or rule working with 500KB blocks.

What really happens?

Nodes that don’t get upgraded for whatever reason will still confirm new transactions to be valid since 500k is less than 1MB. The downside to this is that if outdated nodes continue to mine blocks, the new blocks they mine will be incompatible with the upgraded nodes. Therefore, soft forks require a lot of hash power within the network.

What can possibly go wrong?

A soft fork that is supported by a meager hash power of the network will quickly become the shortest chain and get dumped by the network, like a bad habit, of course. Like a hard fuck, it could also lead to a severe and lasting divide within the community.


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