Table of Contents
When dealing with decentralized technology, there is often much more than meets the eye. Peeling back the layers of blockchain technology exposes the dense lower layers of the blockchain and cryptocurrency world, where extremely complex moving parts take place to ensure that decentralized blockchains remain safe and trustworthy, free of centralized power.
Unlike centralized systems, blockchains cannot invoke top-down maintenance to make changes, as in a conventional system, power is centralized and changes are easy to make. Blockchains, on the other hand, consist of nodes operating from around the world, with no single point of control or failure.
Because of this, blockchains can be decentralized, but also require branching to make changes to the blockchain such as new rules, bug fixes or software additions. Let’s learn how soft and hard forks work to keep blockchains up to date, yet secure and decentralized.
What are forks?
When dealing with blockchains fork It is believed that this happens when a blockchain creates two different potential paths forward. Miners, who must constantly agree to the rules of the blockchain, will also have to agree to rule changes.
To change the rules, you need a blockchain fork that demonstrates a rule or protocol change. Forks often lead to different cryptocurrencies with similar names, such as Bitcoin Cash and Ethereum Classic, as new chains are created.
Not all forks are done intentionally, and accidental forks can occur when two miners mine the same block in the blockchain almost simultaneously. The solution to the problem of unintentional forks will happen automatically, as one chain keeps adding blocks, the other block will be abandoned, which is considered an orphan block.
Hard-Fork vs. Soft-Fork
Both types of forks occur when the cryptocurrency code is changed, with the biggest difference between hard forks and soft forks being their desired result.
Both hard forks and soft forks are necessary tools for blockchain longevity, and both are used for different purposes to make changes to a decentralized system. Without forks, making changes to the blockchain would require a centralized body with top-down control.
Hard forks
Hardforces in blockchains occur when a permanent altcode appears in the chain and some of the existing nodes refuse to accept previous versions of the blockchain. A hardfork requires all current nodes to be updated to the newest version. In turn, the new version of the blockchain becomes completely different from the previous version and backwards incompatible.
A hard fork may have been needed to radically change the blockchain protocol or fix a bug. In most cases, nodes that still exist in the old chain will soon realize that their blockchain is obsolete and not being updated, leading to an upgrade to the newest version of the chain.
The hard fork has several other reasons, such as transaction redundancy, which was demonstrated during the 2016 Ethereum hack, to add new features to the chain or eliminate any security threats that the current version poses to the chain.
Hardforces, as the name implies, are much more complex than softforces. They create a gap between the two sides and often sharply divide communities in half, creating two sub-communities.
Examples of hardforces
Bitcoin Cash Hardfork
After SegWit (Segregated Witness) was implemented, the famous Bitcoin happened a hard-fork, which resulted in Bitcoin Cash. Some bitcoin developers did not like the new changes made by SegWit to the cryptocurrency and decided to hard-fork the blockchain, resulting in Bitcoin Cash in late 2017.
Bitcoin Cash is a independently successful cryptocurrency that is currently ranked #24 and never uses SegWit.
There have been several other Bitcoin hard forks, resulting in cryptocurrencies such as Bitcoin Gold, Classic and Unlimited.
The Etherium Dilemma
In July 2016, the Ethereum blockchain conducted a hard-fork to return more than $40 million worth of Ethereum from the hacker’s address to a new address.
The hard-fork allowed funds to be transferred through a new smart contract to allow the original owners of the taken funds to return them in the form of DAO tokens.
Soft forks
Conversely, softforcs require most nodes or miners to migrate to the new rules because softforcs are backward compatible. To ensure backward compatibility, the new rules must not conflict with the old rules so that nodes can maintain their current version.
Soft forks allow rules to be integrated into the chain without forcing all node holders to update, for example by reducing the block size of the chain, which has been successfully implemented with the ‘SegWit‘ soft fork that we will touch on shortly.
Because softforks store everything in one chain, there is no risk of “double spending” as in hardforks, since the holders of a coin or token only have access to it in one chain.
The main danger of softforks, although thought to be easier to execute, is that attackers trick miners into checking rules that contradict the blockchain to their advantage. Hard forks limit this risk because they are not backward compatible, so miners prefer hard forks to soft forks.
Examples of softforces
SegWit softfork
In August 2017, the Bitcoin chain underwent a soft fork of the Segregated Witness protocol, implemented to increase block size limits and increase the speed of transactions in the chain.
As noted earlier, although SegWit was a softfork, it prompted several miners who did not like the new protocol to insist on a hardfork, creating Bitcoin Cash.
Why are forks so important?
Forks are vital for updating a decentralized blockchain where there is no centralized top-down authority to make changes.
Conclusion
While hard and soft forks can be nerve-wracking for those associated with cryptocurrency, and especially difficult for node operators or miners, forks are inevitable processes in maintaining decentralization and blockchain security.
Soft and hard forks will continue to happen to major cryptocurrency blockchains, such as Bitcoin and Etherium, to keep them safe and the network updated for years to come.
When dealing with decentralized technology, there is often much more than meets the eye. Peeling back the layers of blockchain technology exposes the dense lower layers of the blockchain and cryptocurrency world, where extremely complex moving parts take place to ensure that decentralized blockchains remain safe and trustworthy, free of centralized power.
Unlike centralized systems, blockchains cannot invoke top-down maintenance to make changes, as in a conventional system, power is centralized and changes are easy to make. Blockchains, on the other hand, consist of nodes operating from around the world, with no single point of control or failure.
Because of this, blockchains can be decentralized, but also require branching to make changes to the blockchain such as new rules, bug fixes or software additions. Let’s learn how soft and hard forks work to keep blockchains up to date, yet secure and decentralized.
What are forks?
When dealing with blockchains fork It is believed that this happens when a blockchain creates two different potential paths forward. Miners, who must constantly agree to the rules of the blockchain, will also have to agree to rule changes.
Continue Reading
To change the rules, you need a blockchain fork that demonstrates a rule or protocol change. Forks often lead to different cryptocurrencies with similar names, such as Bitcoin Cash and Ethereum Classic, as new chains are created.
Not all forks are done intentionally, and accidental forks can occur when two miners mine the same block in the blockchain almost simultaneously. The solution to the problem of unintentional forks will happen automatically, as one chain keeps adding blocks, the other block will be abandoned, which is considered an orphan block.
Hard-Fork vs. Soft-Fork
Both types of forks occur when the cryptocurrency code is changed, with the biggest difference between hard forks and soft forks being their desired result.
Both hard forks and soft forks are necessary tools for blockchain longevity, and both are used for different purposes to make changes to a decentralized system. Without forks, making changes to the blockchain would require a centralized body with top-down control.
Hard forks
Hardforces in blockchains occur when a permanent altcode appears in the chain and some of the existing nodes refuse to accept previous versions of the blockchain. A hardfork requires all current nodes to be updated to the newest version. In turn, the new version of the blockchain becomes completely different from the previous version and backwards incompatible.
A hard fork may have been needed to radically change the blockchain protocol or fix a bug. In most cases, nodes that still exist in the old chain will soon realize that their blockchain is obsolete and not being updated, leading to an upgrade to the newest version of the chain.
The hard fork has several other reasons, such as transaction redundancy, which was demonstrated during the 2016 Ethereum hack, to add new features to the chain or eliminate any security threats that the current version poses to the chain.
Hardforces, as the name implies, are much more complex than softforces. They create a gap between the two sides and often sharply divide communities in half, creating two sub-communities.
Examples of hardforces
Bitcoin Cash Hardfork
After SegWit (Segregated Witness) was implemented, the famous Bitcoin happened a hard-fork, which resulted in Bitcoin Cash. Some bitcoin developers did not like the new changes made by SegWit to the cryptocurrency and decided to hard-fork the blockchain, resulting in Bitcoin Cash in late 2017.
Bitcoin Cash is a independently successful cryptocurrency that is currently ranked #24 and never uses SegWit.
There have been several other Bitcoin hard forks, resulting in cryptocurrencies such as Bitcoin Gold, Classic and Unlimited.
The Etherium Dilemma
In July 2016, the Ethereum blockchain conducted a hard-fork to return more than $40 million worth of Ethereum from the hacker’s address to a new address.
The hard-fork allowed funds to be transferred through a new smart contract to allow the original owners of the taken funds to return them in the form of DAO tokens.
Soft forks
Conversely, softforcs require most nodes or miners to migrate to the new rules because softforcs are backward compatible. To ensure backward compatibility, the new rules must not conflict with the old rules so that nodes can maintain their current version.
Soft forks allow rules to be integrated into the chain without forcing all node holders to update, for example by reducing the block size of the chain, which has been successfully implemented with the ‘SegWit‘ soft fork that we will touch on shortly.
Because softforks store everything in one chain, there is no risk of “double spending” as in hardforks, because the holders of a coin or token only have access to it in one chain.
The main danger of softforks, although thought to be easier to execute, is that attackers trick miners into checking rules that contradict the blockchain to their advantage. Hard forks limit this risk because they are not backward compatible, so miners prefer hard forks to soft forks.
Examples of softforces
SegWit softfork
In August 2017, the Bitcoin chain underwent a soft fork of the Segregated Witness protocol, implemented to increase block size limits and increase the speed of transactions in the chain.
As noted earlier, although SegWit was a softfork, it prompted several miners who did not like the new protocol to insist on a hardfork, creating Bitcoin Cash.
Why are forks so important?
Forks are vital for updating a decentralized blockchain where there is no centralized top-down authority to make changes.
Conclusion
While hard and soft forks can be nerve-wracking for those associated with cryptocurrency, and especially difficult for node operators or miners, forks are inevitable processes in maintaining decentralization and blockchain security.
Soft and hard forks will continue to happen to major cryptocurrency blockchains, such as Bitcoin and Etherium, to keep them safe and the network updated for years to come.
