What Are Blockchain Forks?
Blockchain technology has brought about a revolution in the world of finance, data management, and various other industries.
Its decentralised and secure system has introduced a new level of trust and transparency. Yet, it doesn’t come without its complexities — one of which is the blockchain fork.
Understanding Blockchain Forks
A blockchain fork is a split in the blockchain’s transaction history, which in turn leads to the existence of two separate chains.
Two types of forks can occur on the blockchain — a hard fork or a soft fork.
Hard Fork: A hard fork occurs when a blockchain’s protocol is altered, making previously invalid transactions valid or vice versa. This change is not backwards-compatible, meaning all participants on the network must update their software to the new version.
Hard forks are usually the result of community disagreements regarding network rules or the need for important updates. As a result, they create two distinct chains, each with its transaction history.
A prime example of a hard fork is Bitcoin Cash (BCH), which was forked from Bitcoin to increase the block size, allowing for more transactions per block.
Soft Fork: Conversely, a soft fork is a backwards-compatible change to the blockchain’s protocol. Unlike a hard fork, it does not split the network because old nodes will still accept new transactions.
Soft forks are typically implemented to tighten security or add new features without causing division in the community.
The “Segregated Witness” (SegWit) upgrade in Bitcoin is a famous soft fork. It separated the transaction data, allowing more transactions per block and enabling the implementation of the Lightning Network.
Why do Blockchain Forks Happen?
Blockchain forks are not random events. Rather, several factors can trigger a blockchain fork. These include:
Community Disagreements
Disagreements among developers, miners, or stakeholders about changes to the blockchain’s rules can lead to forks. These disagreements can be about block size, transaction speed, security measures, or other technical aspects.
Network Upgrades
When a blockchain needs to upgrade its software or implement new features, it can result in a fork. Upgrades can be essential for scalability, security, and efficiency.
Emergency Fixes
In some cases, a critical vulnerability or bug may be discovered in the blockchain’s code. To protect the network, developers may implement an emergency hard fork to correct the issue.
Overall, blockchain forks represent critical moments in a blockchain’s evolution, signifying its capacity to adapt and improve. While they may sometimes appear as challenges or even points of contention, they are fundamental to the continued growth and development of blockchain technology.
