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?
The formation of blockchain forks is 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 Blockchain Forks Work?
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.
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.
What are the Two Types of Forks in Blockchain?
The two types of forks in blockchain would be:
1. Soft Fork
Learning about what are the two types of forks in blockchain, we first come across soft forks. In simple language, a soft fork is a software upgrade for the whole blockchain network. Since the end result is a single blockchain, the changes made here are backward compatible with pre-fork blocks. This method has been used to add new features to existing blockchains like Bitcoin and Ethereum.
2. Hard Fork
Whenever a new chain is generated from the original blockchain, it is considered a hard fork. Here, the changes made to the original set of codes are no longer backward compatible, creating a secondary blockchain for the network. Earlier blocks stop being compatible with the new chain and lead to generating a new cryptocurrency. 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.
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.
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