Cryptonomics: What are Blockchain Forks

The blockchain network is entirely open-source software with easily accessible code. One can change the code and suggest improvements through soft and hark forks.

By
Utulu Hope
on
April 15, 2021
Category:
Cryptonomics

Introduction 

Take your smartphone, for example; if one wants to update an important application, they don't hesitate. In some cases, the application updates automatically. This is because it is necessary to keep an application updated as an outdated version may not offer its new services. 

In contrast with software applications, Cryptocurrencies work pretty differently. Due to the blockchains decentralized nature there is no pecking order. This means that no bank or corporate body can decide to make changes or update the open-source software as they please. In this light, it can be very challenging to make changes on a blockchain network. 

Today, we will shed more light on how cryptocurrency networks can be upgraded, despite the absence of a principal authority. For this to be done, two mechanisms need to be utilized. These two mechanisms have been coined "hard forks" and "soft forks.”


What is Blockchain Fork? 

To understand the concept of a blockchain fork, we will explain what a software fork is. A software fork is a phenomenon that occurs when software is copied and modified. After this is done, the original project still exists, but it exists separately from the newly created one. The new software typically embodies a different concept. For instance, if a team disagrees about how their website's content should be displayed, some team members may come out to form a new website. The new team may create their website with the same template as the old one but with different content and features. In this scenario, the new website is a fork of the original one. 

The two websites now have a common ground and share a history. However, there is now a permanent deviation in their directions. The same similar concept applies on the blockchain. The process by which a blockchain is copied and modified to create a new blockchain such that they have different paths is called a blockchain fork. 

Blockchain forks have occurred with many open-source projects long before the inception of the two glorified crypto assets, Bitcoin and Ethereum. Blockchain forks can be classified into two — hard forks and soft forks. 


Difference Between Hard Forks and Soft Forks 

Although they both have similar names and can be used for similar purposes, they are different. Let us explain each of them: 


Understanding Hard Forks 

In a simple description, hard forks are "backward-incompatible software updates." They occur when nodes add new rules that dispute the rules of the old node. These new nodes can only work with others who use the new version. When this happens, there is a split in the blockchain, and two separate networks are created — Both having different rules. 

Both networks will work simultaneously and continue to produce blocks and transactions. However, they no longer exist on the same blockchain. This is because both nodes had an equal blockchain presence before the fork took place. The initial history still exists but they will no longer have the same blocks and transactions thereafter.    

If you have a token on a blockchain before the fork, you will end up having tokens on both networks after the fork because of the shared history. An example of a hard fork occurred in 2017. The fork saw Bitcoin split into two different chains — Bitcoin/BTC (the original one) and Bitcoin Cash/BCH (the new one). The advocates of BCH wanted to increase the block size, while the advocates of BTC were not in support. 

This fork was focused on the increase in block size, but there are many other reasons why many developers enforce a hard fork. Some of these reasons may include correction of important security risks discovered in the older version, adding new features and functions, etc. 


Understanding Soft Forks

Unlike the hard fork, a soft fork is a backward-compatible upgrade. This means that the new node will still interact with the old node. In other words, a soft fork is an upgrade of the previous network, which arises from the addition of new rules that do not conflict with older rules. 

For instance, a decrease in block size can be executed through a soft fork. Again, let us use Bitcoin to clarify what we mean.. For Bitcoin, there is a limit to how big a block can be, but there is no limit to how small it can be. If the plan is to accept only small blocks, all that is required is to reject bigger ones. Moreover, you won't be automatically disconnected from the network when this is done. 


Hard Fork Or Soft Fork? 

Both forks may be used for different purposes. A disputable hard fork may cause a lot of severe consequences. It can go as far as dividing the community. Why this is true, a hard fork can be planned and beneficial. In this case, it can give freedom to modify the software because everybody is in agreement. 

Soft forks are typically a  more subtle option. Here, one is limited to the changes that can be made, ensuring it doesn't conflict with the old rules. Therefore, if the update is compatible, there is no need to fragment the network. 


Conclusion 

Both mechanisms — hard forks and soft forks are very vital to the growth of blockchain networks in the long run. They give license to implement modifications and improvements in decentralized systems, as there is no principal authority. 

Blockchain forks present the possibility of integrating new features to blockchains and cryptocurrencies under development. The absence of these mechanisms will require a centralized system with complete control. Otherwise, we may have to adhere to the same rules on a given protocol for life. 

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Utulu Hope

UC Hope is a passionate fan of crypto who could weave the latest event into sparks of inspiration and information. He leaves no stone unturned to get to the core of a story. Aside from writing, he spends his hours poring over algorithms and protocols, preparing for a future career as a computer programmer.

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