When you start with blockchain, you will find so many terms that you need to watch out for. Among all the terms like circulating supply, nodes, blocks, tokens, divergence, and several others, the most important term is forking.
If you are associated with the cryptocurrency world, you may have already come across this word. It is a potential tool that can change the scope of an entire crypto project. In this article, we will discuss the two forms of the fork — hard fork and soft fork and will cover everything that you need to know.
Forking:
Forking refers to a state when a token project or cryptocurrency requires the making of technical updates in its code. Ethereum & Consensus fork are also two related terms. Without any major changes related to service, these updates either will be implemented to a project’s backend, or else they will change the original project’s scope fundamentally.
Any of blockchain’s divergence is implied by forking. It includes both temporary divergence and permanent divergence. In simple words, forking takes place at the time when a blockchain gets split into two branches.
It takes place because of changes in the consensus forking algorithm mostly. But it can also happen in case of software changes. Based on the change in nature, you can divide the fork into a soft fork and a hard fork.
Soft Fork:
Soft fork takes place when a change is made to the protocol of the software and keeps the protocol compatible backward. In short, the latest forked chain not only will follow the new rules but also will honor the previous rules. And the original chain continues to run behind the previous rules.
The majority of miners are required in this kind of fork to implement the latest rules. However, in a hard fork, almost all the nodes were required to evolve and agree.
Often the new types of transactions can be included as soft blockchain forks. It requires the participants to only understand the new type of transaction. This is processed by making the new transaction displayed as a “pay-to-anybody” transaction to the previous clients.
It gets the miners to agree about rejecting blocks unless they are validated under the latest rules. It is because of the temporary divergence of the Blockchain, a soft fork may take place at times. It happens when miners do not make use of the latest nodes and violate the latest rule of the consensus that their nodes are not aware of.
Hard fork:
When you say hard cryptocurrency forks, you mean permanent divergence. It is different from the blockchain’s previous versions. The nodes that were running the blockchain’s previous versions will no longer be accepted by the blockchain’s latest version.
In the case of a hard fork, it is everything about a radical change that makes the transactions or blocks that were valid previously invalid. No transaction associated with the forked chain will be valid for the previous chain.
If the miners and nodes want to be on the latest forked chain, they must go through an upgrade. This leads to the creation of a blockchain fork. The upgraded blockchain (new) is followed by one path, and the other one continues to follow the previous path.
Only if you get sufficient support from the community, a hard fork is possible. Most of the miners provide a green signal to the fork or upgrade, and only then do the chain developers begin working on the latest code. About 90–95% of miners contribute to the support.
Bitcoin Cash is a great example of a Hard Fork or Ethereum fork. In the game of cryptocurrency, Bitcoin was considered to be a dominant player. But no sooner, with the slowdown of transaction times, the fees began rising, Bitcoin’s future was at stake.
Bitcoin was less of a usable currency and was becoming more of a value store. This resulted in a political division in the community of Bitcoin. The community’s one half wanted to keep the Bitcoin unchanged. They believed that any changes made will divert the path from its original version. And the Bitcoin community’s other half wanted Bitcoin to upgrade, as they felt that it would make Bitcoin the first decentralized currency of the world.
Thus, to neutralize the situation, the Bitcoin community opted for a hard fork and divided it into two different classes of an asset- Bitcoin Cash and Bitcoin. It resulted in custom cryptocurrency creation. Bitcoin cash became cheaper as well as faster. And Bitcoin remains unchanged.
Conclusion:
We can see that the world of cryptocurrency is massive. And it is constantly evolving. Forking is not going to end early.
With the evolution of the landscape of cryptocurrency, more forking can be expected in the future and will help in mass adoption. And when mass adoption continues to explode, more cryptocurrency projects will need to start forking.
