September 2022 | Page 2 of 3 | Shardeum | EVM based Sharded Layer 1 Blockchain

Introduction

A blockchain fork is a change in the protocol of a blockchain network that creates two separate versions of the blockchain with different rules. This can happen in various ways, such as a software update incompatible with older versions, or a disagreement among network participants about the project’s direction. A fork in blockchain might result in the creation of a new cryptocurrency, as well as bring changes to the way transactions are processed and consensus is reached on the network. In this article, we will provide a detailed explanation of what is a blockchain fork, what are the two types of forks in blockchain, and why they occur.

What is a Blockchain Fork?

Even if you have been in the crypto space for a while now, you may not have completely grasped the concept yet. A blockchain is a network of connected virtual blocks that stores information cryptographically, as you might be aware. Blockchains are usually open-source networks, and the codes are free to be edited and built upon. Once a developer creates a blockchain application upon the base code of another blockchain, we get a secondary chain with the original chain’s history; these secondary chains are what we call blockchain forks.

Let’s get into a bit more detail about these blockchain forks, shall we?

Why are Blockchain Forks Important?

Now that you have understood what a blockchain fork is, the formation of blockchain forks is another concept that is also very important when it comes to blockchain upgradation. If DApp (decentralized application) developers need modifications to the current state of a blockchain to facilitate a particular product or service, the whole chain would need to undergo an upgrade again and again, which would be a very difficult thing to do. Blockchain forks are a solution to this inconvenience.

In addition to eliminating the need for a blockchain’s upgradation time and time again, blockchain forks also keep all developers and end users connected with the flow of information and data on the main blockchain.

Blockchain forks are sometimes created to add to the security factor as well.

How do Forks Work?

How do Blockchain Forks Work — *Source:* *Medium* */ Working of blockchain forks*

Whenever asked about what a blockchain fork is, many tend to associate it with the creation of new tokens from an older blockchain. There is a major difference between both, and blockchain forks are more like an upgradation procedure. An existing blockchain network is picked up, some rules and protocols are modified as per requirement, and new ones get added to it as well. As a result, a secondary branch of the existing chain develops, and this new chain may or may not have a new token.

In simple words, the answer to ‘what is a blockchain fork, and how do they work?’ would be that blockchain forks are created when any modifications are made to the original blockchain protocol. Now this may work in multiple ways. When different miners see their software getting disarranged, they may choose to continue with a particular blockchain. Now if two miners aren’t on the same page, a blockchain may give rise to two different versions or a fork. Secondly, developers of the blockchains may also decide to create forks while adding new features or improvements to the network. Blockchain forks are very common in open-source projects.

The fork may either be created from the existing blockchain, where the blockchain may be split to create a fork, or else entirely new tokens may be created by modifying the original code of the blockchain. This may be done for various purposes by open-source communities.

Meanwhile, the new blockchain fork could share some common characteristics and history with the parent blockchain, but it usually sets out with a different goal with multiple updates from the original.

Bitcoin Cash (made by forking the Bitcoin blockchain) is a good example of a blockchain fork, and it also brought in a new token.

How are Forks Bringing Change to the Crypto Landscape?

Under the current scenarios, the Ethereum blockchain works as a perfect example when it comes to learning about blockchain forks and how they bring more utilities to blockchain. The upcoming Ethereum 2.0, Ethereum Classic, and Ethereum itself work as three branches of the same parent blockchain.

As we know, a blockchain is originally created with a set of rules and moving forward, required updates are made through changes in the code. A similar thing occurred with the Ethereum chain as blockchain forks created upgrades to its original smart contracts. Now, the crypto landscape is benefitting from different functionalities offered by the original Ethereum blockchain along with its secondary chains.

Accidental and Intentional Forks

On a typical blockchain, at any given moment, a large number of network participants are trying to create a new block, especially with a consensus mechanism like PoW. With so much competitive mining going on simultaneously, it’s possible for two or more miners to mine a block at once. This is the kind of mishap that creates an accidental fork, but it is quickly resolved by the network. The moment a new block is added to any of the forks, the network picks that one over the other ones(s) and leaves behind the shorter chain.

Intentional forks, on the other hand, are planned changes to the blockchain protocol deliberately implemented by developers or the community. These forks are carried out to introduce new features or change the way the network operates.

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What are the Two Types of Forks in Blockchain?

Soft Fork And Hard Fork — *Source:* *Finance Magnates* */ Types of blockchain forks*

While discussing ‘what are the two types of forks in blockchain?’, the hard fork vs. soft fork theory is not very difficult to understand. Let’s look into it in detail:

1. Soft Fork

‘What is a blockchain fork, when it comes to soft forks?’, you ask. To understand soft forks, let us go through backward compatibility first. Whenever new rules are added to a system that do not interfere with the old rules, while the old rules also consider the new version to be compatible, the model is called backward compatibility. Soft forks work on this same concept. The old version of the blockchain holds newly mined blocks in a blockchain fork as valid in the case of a soft fork. Thus, the new rules can co-exist with the old version of the blockchain, while the updated blockchain will be responsible for validating transactions. This method has been used to add new features to existing blockchains like Bitcoin and Ethereum.

2. Hard Fork

In the case of a hard fork, the upgrade to a blockchain is done in a non-backwards compatible way, which is the exact opposite of soft forks. This means that the old version of the blockchain protocol does not hold any newly mined blocks as valid. Usually, in a hard fork, new crypto tokens come into existence, which are distributed equally to the nodes with the upgraded software. Since hard forks are rigid changes to the software, full nodes that do not upgrade their software according to the new chain will become incompatible with the blockchain. Bitcoin Cash and Bitcoin Gold are two prominent examples of the hard fork.

Examples of Blockchain Fork

Bitcoin XT was one of the first notable blockchain forks and had a significant impact. However, the most successful Bitcoin fork was definitely Bitcoin Cash in 2021. Ethereum also has successful blockchain forks: Ethereum Classic and Ethereum 2.0.

Why do Blockchain Forks Occur?

As mentioned before, there are several reasons why blockchain forks are needed, namely:

1. Adding New Functionality

A new blockchain fork is created whenever there is an addition needed to the current functionalities of the existing chain.

2. Fixing Security Issues

Blockchains sometimes require certain changes to the code and protocols in place for maximized security, which would require the generation of a blockchain fork.

3. Reverse Transactions

Since a blockchain is mainly a set of codes that can be amended in case of malicious transactions or security breaches, the whole community can reverse all the transactions of a particular period. It leads to the generation of a secondary chain but is an effective security method.

Future of the Blockchain Fork

Now that we know things like ‘what is a blockchain fork?’ and ‘what are the two types of forks in blockchain?’, it’s easy to see that blockchain forks have contributed significantly to the evolution of the blockchain landscape and will continue to do so. The future for blockchain forks may hold different outcomes, but most likely, the overall benefit of the blockchain ecosystem is a given. Different opinions on blockchain may give rise to contentious hard forks, while soft forks can also rise with their efficiency in adding improvements to blockchains with less consensus or disruption.

Multi-chain characteristics or increasing interoperability may reduce the need for forks, but still, major updates or improvements could continue to be done through soft forks. A combination of market demands and technical upgrades may determine the future of blockchain forks.

Conclusion

The whole world of technology keeps evolving with time, and blockchains are keeping up with gusto. However, this does imply a need for continuous upgradation in blockchains. Blockchain forks keep blockchains transforming into newer, more secure, and advanced versions of themselves and also birth new cryptocurrencies. It’s pretty clear why they are integral in the growth of the general crypto ecosystem.

We hope by now the answer to ‘what is a blockchain fork?’ is clear to you, along with the answer to ‘what are the two types of forks in blockchain?’

Frequently Asked Questions (FAQs)

1. What does Fork mean in NFT?

When a blockchain fork happens, which shows the developers and users could not agree on one direction for the blockchain to take, every existing NFT minted on the chain needs to be duplicated so it can exist on both chains.

2. What is Bitcoin Fork?

A Bitcoin fork can be either hard or soft. It is an upgrade or a split in the original blockchain network that gives rise to new versions of the blockchain. These new versions may follow their own protocol, depending on the kind of fork.

3. Why is Forking Needed in Blockchain?

You know ‘what is a blockchain fork?’, but coming to why forking is actually needed in blockchain, it is to make network protocol changes, such as introducing new features or fixing bugs. The fork in blockchain also allows different versions of the blockchain to coexist, allowing users to choose which version they want to participate in, and allowing the network to evolve and adapt over time.

4. How are Forks Continuing to Change the Crypto Landscape?

The blockchain space is growing through rapid developments everyday as the older blockchains start suffering from issues related to the scalability trilemma, for example. To increase scalability and interoperability for blockchains, among other things, both soft and hard blockchain forks are an utmost necessity. Like Ethereum 2.0, blockchain forks are going to keep introducing new possibilities to the blockchain and crypto landscape.