Why do cryptocurrencies fork?

As part of our ongoing series exploring the basics behind Bitcoin, today we’re exploring forks.

Why does a cryptocurrency fork?

Most cryptocurrencies are open-source , which means there isn’t one person or group who controls how the currency should evolve.

That can make things tricky, for a number of reasons.

• 🔧Deciding on what problems to fix or solve first
• 😕What to do if miners solve a block at the same time
• 👨‍💻What happens if the network the currency is built on is hacked

This leads to a fork: or a change in the underlying rules of how the blockchain works.

But not all forks are created equally.

Soft Forks

Soft forks are what happens when the software the blockchain is built on is upgraded.

What’s unique about soft forks is they allow users on the platform to upgrade over time. They’re effectively backwards compatible.

In a nutshell, most things remain the same, bar a few tweaks, and the community is on board and happy with the changes.

Hard Forks

Hard forks meanwhile, are changes to the blockchain that are not backwards compatible, and it forces everyone on the network to upgrade to the newest software in order to keep participating.

Those who don’t upgrade, don’t get to participate. If there are enough members in the previous version of the blockchain, two versions now exist.

Some of those forks can be planned, and are referred to has Planned Hard Forks, where as sometimes there is no plan in place, and they fall into the Contentious/Unplanned Hard Fork category.

Planned Hard Fork

When the community agrees on a new direction for the blockchain they’re a part of, a hard fork is planned.

That means everyone agrees to upgrade the software, create a new blockchain, and leave behind the old blockchain.

One of the most famous planned hard forks was on ETHEREUM . Called Byzantium, it was a hard planned fork that took place in October 2017 to help improve Ethereum’s scalability.

Want to know more?

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