A Closer Look at the Blockchain Fork

Blockchain fork is a simple change to blockchain network protocol. When the blockchain forks, it splits into two independent networks with two independent blockchains. In this guide, we will discuss how blockchain forks occur and some of the most famous forks in history.

Blockchain fork is a technical event. When miners on the network find a block at almost the same time, two blocks are created simultaneously in different parts of the network. Fork can occur as part of planned protocol updates, community driven initiatives to add new or enhance existing functions, and as a result of cyber attacks. Anything designed to be decentralized is done at the risk of fork. Now many cryptocurrencies have been forked into smaller parts many times.

Definition of Blockchain Fork

The fork of blockchain means that a single cryptocurrency is divided into two. This can be for a variety of reasons, but typically when there are differences between a group of people who have control over the supply of coins. If these people do not agree with the management of coins, they will initiate fork and divide the blockchain into two independent chains.

Fork can be considered as a permanent disagreement in the blockchain, which occurs when miners find blocks at the same time. Two or more blocks may point to effective transactions within a certain time range at the same time, resulting in fork on the network.

Fork is usually solved by the consensus of miners to choose one branch of fork as an effective branch. However, in some cases, fork can lead to permanent differences in the blockchain history of cryptocurrency. If this happens, two separate and incompatible ledgers will coexist on the network for a period of time before reaching a consensus on which ledger is considered valid and which ledger is considered invalid.

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Why Does Blockchain Fork Occur?

At any time, if someone uses Bitcoin (BTC) software without modifying it, they will basically get an updated version of the Bitcoin core in each Bitcoin transaction, so there will be no fork.

However, if someone makes any changes, even if it’s just a character in the software, it’s considered a fork, because the new version of the software will be incompatible with the previous version.
Most forks are made for planned upgrades so that everyone can get the latest security and functions of the protocol. However, in some cases, someone suddenly found a vulnerability or error in Bitcoin software, which led to fork without any warning. In this case, it is usually a small group of developers who quickly fix the vulnerability and release a new version of the software. They may only exist on GitHub for a few hours, and then they will get the hash value of most people and become permanent.

 

Type of Blockchain Fork

Fork refers to the splitting and changing direction of blockchain. Now there are two chains. The previous chain will become stagnant and stop growing, while the new chain will begin to grow more than before.

There are several types of fork, which can be divided into accidental and intentional. Unexpected fork refers to the occurrence of long blockchain branches after the network is shunted to two or more directions due to errors in the code or abnormal hash rate fluctuations. Unexpected forking causes nodes to see blocks generated on top of old blocks, causing them to think they are working on an invalid chain.

At the same time, deliberate fork, sometimes called personal fork, occurs when a node operator decides to start their own blockchain and generate blocks on it. It is worth noting that intentional fork can be soft or hard. Soft fork is used to verify changes in the rule set of transactions and blocks. These changes can only be implemented by soft fork if they are accepted by most participants. When the nodes in the network cannot reach a consensus on the protocol operation rules (i.e. what makes the block effective), hard fork will occur. This may be due to the lack of consensus among participants and the error of changing the block effectiveness standard in the system.

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What is Hard Fork?

Hard fork, as the name suggests, is a software upgrade that is not backward compatible with older versions. In other words, if you choose to install and run new software, your old version will no longer work, and vice versa. Hard fork is a radical change to a network protocol, which requires all nodes or users to upgrade to the latest version of protocol software.

It is said to be “irreversible” compared with the old version of software. If you don’t upgrade your software, the new implementation won’t recognize you as part of the network. Due to the lack of backward compatibility, hard fork is controversial. What happens if some people start using new software and others don’t? What happens if the person running the old version of the software doesn’t agree with the change? To answer these questions, we first need to understand the causes of hard fork.

Hard fork is a form of “democracy”. If enough people support this change, the new version will be adopted and the old version will no longer be feasible. In this way, everyone can collectively decide whether they want to upgrade. Usually, if more than 50% of miners support hard fork, it will be activated and become permanent (i.e. there is no way back).

Main Benefits

However, if miners representing less than 50% of computing power want to create an upgrade that deviates from the original rules of the network, they can do so by adding replay protection. In this way, only one chain will be considered effective and “real”. Hard fork has two main benefits. First, they solve the problem of extension. By increasing the block size, hard fork allows more transactions to be processed at the same time, which means lower cost and shorter confirmation time. In other words, larger blocks can accommodate more transactions without having to pay higher fees or wait for hours or even days for a single confirmation.

Secondly, hard fork solves the problem of consensus. The original Bitcoin software had a limitation that it was deliberately placed there (this was not an accident). Initially, Bitcoin was designed as a 1MB block because developers wanted to limit supply in order to push up prices and make early investors rich.

 

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Soft Fork and Hard Fork

Soft fork is an upgrade of a system to make it more secure or efficient, but still understand the old system that has not been updated. It is called “soft” because all blocks created by the old software version can still be recognized by the new software. If everyone turns to the new version, there is no difference from the user’s point of view. Therefore, miners and users will adopt updates very quickly (usually within a few days). Soft fork only requires most miners to upgrade their software.

Hard fork is a protocol change that makes the previous version incompatible with the new version. The goal of hard fork is to upgrade, but this change is not backward compatible. In order for this type of upgrade to work, everyone needs to switch at the same time, because if some people continue to use the old version, there will be two different types of coins, which may lead to transaction problems between users of different versions. If there is a split, the two groups will use different currencies.

Some Difference

Hard forks are not compatible with previous versions because they usually change something and make it more difficult for people to continue using pre upgraded software. For this reason, hard fork requires broad consensus, such as 95% among everyone who uses the coin. This is very rare (for example, there is no consensus to hard fork Bitcoin into Bitcoin cash).

Unlike soft forks, soft forks only require miners to update, while hard forks require every participant in the network to upgrade their clients. Otherwise, they cannot continue to stay in the cryptocurrency ecosystem (and lose all their money). These types of fork require a lot of planning. If not implemented correctly, it will even reduce the security of cryptocurrency.

Soft forks are the most common type of blockchain upgrade because they are backward compatible and only require most miners to upgrade their software, but sometimes if there is a split, they will lead people to use different currencies, such as Bitcoin cash (BCH). Hard forking is incompatible with previous versions and requires everyone to use similar clients so that one currency does not become two, but it requires a near consensus among participants.

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Conclusion

Blockchain fork is to divide the blockchain into two independent chains. This happens when miners disagree on the proposed modification of the blockchain. When this happens, the miners will be divided into two groups, and each group will continue to mine its own version of the blockchain. Obviously, fork promotes the further upgrading and development of blockchain.