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Bitcoin - Hard Fork, Soft Fork, UASF, UAHF

Aug 01, 2017 Posted /  2735 Views

Bitcoin - Hard Fork, Soft Fork, UASF, UAHF

Bitcoin - Hard Fork, Soft Fork, UASF, UAHF

Hard Fork

As it relates to blockchain technology, a hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions valid (or vice-versa), and as such requires all nodes or users to upgrade to the latest version of the protocol software. Put differently, a hard fork is a permanent divergence from the previous version of the blockchain, and nodes running previous versions will no longer be accepted by the newest version. This essentially creates a fork in the blockchain, one path which follows the new, upgraded blockchain, and one path which continues along the old path.

A hard fork can be implemented to correct important security risks found in older versions of the software, to add new functionality, or to reverse transactions. A hard fork involves splitting the path of a blockchain by invalidating transactions confirmed by nodes that have not been upgraded to the new version of the protocol software. The first and foremost piece of information all bitcoin holders should know is that in the event of a hard fork that splits the blockchain, bitcoins you possess will be perfectly safe.

Over the past year or so hard forks have gotten a bad reputation for political reasons, but in actuality, most types of forks are merely protocol upgrades. A blockchain split occurs during a hard fork which in turn branches the chain into two parts. If this happens, there is nothing a bitcoin holder has to do but wait and watch the fork unfold.

Soft Fork

In terms of blockchain technology, a soft fork (or sometimes softfork) is a change to the software protocol where only previously valid blocks/transactions are made invalid. Since old nodes will recognize the new blocks as valid, a softfork is backward-compatible. This kind of fork requires only a majority of the miners upgrading to enforce the new rules, as opposed to a hard fork which requires all nodes to upgrade and agree on the new version

New transaction types can often be added as soft forks, requiring only that the participants (e.g. sender and receiver) and miners understand the new transaction type. This is done by having the new transaction appear to older clients as a "pay-to-anybody" transaction (of a special form), and getting the miners to agree to reject blocks including these transaction unless the transaction validates under the new rules. This is how pay to script hash (P2SH) was added to Bitcoin.

UASF(User Activated Soft Fork)

It’s a mechanism where the activation time of a soft fork occurs on a specified date enforced by full nodes; a concept sometimes referred to as the economic majority. A UASF requires a lot of industry support and coordination. The UASF concept was combined with SegWit activation in the BIP148 proposal.

UAHF(User activated Hard Fork)

Developers add a mandatory rule set to change the node software. These changes make previously invalid blocks become valid after a flag day, which does not require a majority of hash power to be enforced. Bitmain, a major mining firm, announced “A contingency plan against UASF (BIP148)” in case UASF is applied.

Events leading to Implementation of UASF and UAHF

Bitcoin has some weak points known for a long time.

SegWit is an update for Bitcoin Core. It is assumed that this update will solve the problems. But some users, mining firms, i.e. Bitmain, and companies, i.e. Bitcoin Unlimited, do not support this idea.

According to Bitmain’s announcement UASF or BIP 148 is a dangerous attempt to split the network. The company believes UASF will have severe consequences and referred to the plan as an “attack” or a “wipe out” where there is no backup plan.

“The UASF chain presents a risk of the original chain being wiped out,” explains Bitmain’s blog post. “If there is no contingency plan, all economic activity that occurs on the original chain after the UASF forking point will face the risk of being wiped out. This has disastrous consequences for the entire Bitcoin ecosystem.”

Change in bitcoin on implementation of UASF and UAHF:

If one of these plans is accepted, the next developments depend on the actions of users and miners. The main possible scenarios are :-

1. Both Users and miners agree to the plan. The situation is good. No chances of fork which means there is only one branch.

2. Most users accept the plan; miners do nothing.

- If the number of users is large (>51%) there will be only one branch

- If the number of users is less (<51%) there will be two branches namely the users fork and the miners fork.

- If the number of users grows and achieves more than 51 percent, blocks in the Miners’ fork will be substituted with blocks in the User’s one. Miners are wiped out.

3. Users and miners cannot reach arrangement. In this case, the larger group can make an attack to the smaller one. The transactions made in the smaller group are dangerous since they can be wiped out.

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