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A Detail Look into Cryptocurrency Forks and Why They Take Place


Mar 22, 2018 Posted /  2604 Views


A Detail Look into Cryptocurrency Forks and Why They Take Place

What is a Fork in the world of Cryptocurrencies

The mastermind of the major cryptocurrency Satoshi wrote in the bitcoin whitepaper that “there shall be a fork after reaching a consensus in the bitcoin community”. In recent years a couple of these forks have already occurred. Before we go further let’s try to understand the basics of a cryptocurrency fork with reference to bitcoin the main cryptocurrency.

Bitcoin is having three main stakeholders responsible for its prevalence, these are the Bitcoin core development team, the bitcoin miners and the bitcoin users. For bitcoin to remain legit all these parties must agree with the bitcoin protocols. Incase any of the three parties most especially the users and the miners are not comfortable with the bitcoin protocol a fork can be called for.

The people who supports that the existing algorithm needs a change basically submits their proposal to the bitcoin core development team. Many proposals are taken from the any developer willing to submit one, the core team puts all these proposals for the public to analyses them and find any possible flaws with the solution. Users can vote to choose which solution is best to be activated in the fork.

The Two Common Types of Cryptocurrency Forks

There basically two types of forks in the bitcoin network majorly depending on the which of the bitcoin stakeholders activates it. The bitcoin core developers team can also plan and conduct a fork in the bitcoin network but mainly it maintains the bitcoin codes to remain working and as secure as possible. The core team is the last line of defense for checking for any unforeseen flaws in the codes of an upcoming fork.

Hard fork is a permanent divergence from the current version of a blockchain with nodes on the new blockchain not interacting with the nodes on the old blockchain in anyway. After a hard fork occurs a new blockchain which does not recognize the transaction in the old chain is created.  For nodes to mine blocks in the new chain, all the nodes in the network need to upgrade to the new software standards. Its is important to note that hard forks are majorly activated by miners.

Soft forks on the other hand, allows old transactions to be recognized by new nodes and requires no software updates by existing nodes. After a soft fork the upgraded nodes will allow the old nodes to mine blocks for some time. If upgraded nodes continues to mine blocks, the blocks they mine will be rejected by the upgraded nodes. For a soft fork to occur most of hash power in the network is needed. When a soft fork is only supported by a minority of hash power in the network, it could become the shortest chain and get orphaned by the network. Its ideal to note that soft forks are majorly activated by the bitcoin users without any acknowledgement from the miners.

Why Cryptocurrencies always have Forks

As we mentioned before, forks can be planned for and guided by the core development team of a project or initiated by a group of developers dissatisfied with an element of an existing project. However, the latter is highly contentious process for hard forks and tend to center around governance issues related to the proposed solution.

For successful fork, developers need to believe in the new approach and recognize it, this way forks can be open source and democratic in nature. Forks are always proposed and conducted in cryptocurrency which is an accepted and healthy component of the evolution of the cryptocurrency ecosystem allowing the community to decide which ideas are most desirable and promising. The open source nature of forks ensure that centralization is avoided in the governance of cryptocurrencies.


Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .

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