Forks On The Blockchain | What They Are And How They Work
Curious about forks on the blockchain? Blockchain Forks Explained
Bitcoin Cash, Bitcoin Gold, Bitcoin XT, Bitcoin Classic; why are there so many cryptos with the name bitcoin? Bitcoin’s design is public with an open-source code that anybody can take part in. No one owns or controls it. Its huge community has made changes to the original currency resulting in different versions of the same coin. These versions are known as forks.
Picture the common tool used for eating – the fork. It has one handle where you place your hand, but this handle goes ahead to split into four or three other separate entities that we use to pick up our food. This is the same way forks in the blockchain are. A project on the blockchain will start as one and then split later on because of disagreements within its community.
Let’s look at an example
Let’s take a common example; Bitcoin. New bitcoins are created by many participants in the community known as miners. They verify transactions and add them as blocks to the blockchain. They keep the network secure and ensure you can’t double-spend the coins.
However, these communities of miners and developers will not always agree with each other on the way forward. One group may insist on a particular change in the way things are run while the rest of the group will disagree. When they can’t come to a consensus, this group may decide to go their own way. When this happens, we say a fork has occurred.
Since the two communities couldn’t agree, they take their separate paths. The blockchain is duplicated and splits into two where they can now implement their design solutions independently.
Depending on the nature of the decision, a fork can be categorized into two;
1. A hard fork:
This happens when an irreversible change occurs on the blockchain. Just the way it’s not possible to change a loaf of bread back into its ingredients, a hard fork cannot be undone. This is what happened on 1 August 2017 in the case of Bitcoin and Bitcoin Cash. They both share transaction history until the time of the split.
2. A soft fork
As you had already suspected, the soft fork is reversible. The community may unanimously decide to make changes in the software. The changes made in these cases are backward compatible, making them easily reversible. You can think of it as putting some water in the freezer to form ice cubes. If you don’t like the ice cubes, you can always take them out and they’ll melt back into water. So, if the community doesn’t like the changes they made to the project, they go back to a version they were comfortable with.
You can wake up one day and decide to fork a new version of bitcoin too. Most projects have open-source codes so technically anyone with the skills can make changes. Although, this is easier said and done. You need to have an array of technical requirements to make changes to blockchain software.
On the bitcoin network, there’s been 105 bitcoin fork projects. Only 74 of them are still active projects while the rest had a slow death and are not relevant anymore.
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