You’ve probably heard a lot about blockchains with cryptocurrencies like Bitcoin and Ethereum using public blockchains. But blockchains have many more uses beyond just powering digital currencies. As the blockchain space matures, different blockchains have emerged to suit different needs. In this article, we’ll break down…
Until now, much attention has mainly focused on the environmental impact of cryptocurrencies, a focus shared by many. While this is undeniably crucial, it’s wise to recognize that blockchain technology extends its influence beyond just the ‘E’ in ESG. This post will delve into the…
“Hard forks reveal who truly governs a blockchain — code, miners, or consensus.” — DNA Crypto.
In the context of blockchain technology, a hard fork is a significant protocol change that can result in the validation of previously deemed invalid blocks and transactions, or the opposite. This type of fork requires all nodes or users to upgrade their protocol software to the most recent version.
Hard forks typically originate from developers or a cryptocurrency community that is not satisfied with the features provided by current blockchain implementations. Additionally, they emerge as a means to secure funding for new technology projects or cryptocurrency ventures.
A hard fork occurs when two competing, incompatible updates to a blockchain occur. The winning update creates a permanent divergence from the previous blockchain version.
The introduction of a new rule in the codebase triggers a fascinating phenomenon in the blockchain: a fork. This fork presents two distinct paths—the first follows the upgraded and refined blockchain, while the second continues along the established route. Over time, participants on the older chain realise that their blockchain version is outdated or insignificant. Consequently, they swiftly upgrade to the latest version, aligning with the blockchain’s evolution.
Cryptocurrencies other than Bitcoin are also vulnerable to blockchain forks. This is because all blockchains operate in much the same way, regardless of the platform they run on. You might think of blocks in a blockchain as cryptographic keys that move memory. Because miners in a blockchain set the rules for moving memory within the network, they understand those rules when they are implemented.
To change the rules governing a blockchain, all miners must reach consensus on the new regulations and the definition of a valid block in the chain. This necessitates a “forking” process, analogous to a road split, indicating a protocol shift or diversion. Subsequently, miners update the software to align with the newly established rules.
This forking process has led to the creation of various digital currencies that resemble Bitcoin, such as Bitcoin Cash, Bitcoin Gold, and others. For casual cryptocurrency investors, distinguishing between these cryptocurrencies and tracking the timeline of their respective forks can be tricky.
Moreover, individuals seeking to engage with the top cryptocurrency exchanges must exercise caution when investing in cryptocurrencies such as Bitcoin, as it is crucial to avoid wasting time and money on the wrong digital currency.
While an older code version for a cryptocurrency platform remains on the network, a new one is generated. Ideally, hard and soft forks are fundamentally similar.
With a soft fork, once a user accepts an update, only one blockchain will remain valid. With a soft fork, the old and new blockchains coexist, requiring software updates to conform to the new rules. While a hard fork produces two blockchains, a soft fork is intended to yield only one; both result in a split.
Most users and developers advocate a hard fork, even when a soft fork appears to be a better option, because of the security implications of hard versus soft forks. While updating a blockchain’s blocks requires significant computational resources, a hard fork to enhance privacy is preferable to a soft fork.
Image Source: Adobe Stock
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
The music industry is evolving fast. The rise of streaming services has meant that artists can now reach more people than ever before, but it’s also created lots of problems. The biggest? The revenue generated by streaming is low, and it’s shrinking every year….
Due to the decentralization of cryptocurrencies, bitcoin and Ethereum have really gained popularity. This is due to its secure nature, which supports peer-to-peer architecture, making it possible to transfer funds and other digital assets between two users. Interestingly, all this happens without a central…
Blockchain software company Peersyst announced that they are launching an Ethereum-compatible sidechain on the XRP Ledger’s developer network — a separate network used to test new technologies. XRPL’s sidechain is now live, but it remains in the early phase. It uses Solidity—the coding language…
Yes! Hundreds of billions of dollars are spent each year on public goods and services, but how much ends up in the hands of those who need it most? How much gets stolen by corrupt government officials, corporate executives, and others involved in the…
Blockchain is said to be the backbone of the future internet. This is because the basic singularity of Blockchains, known as the block, constitutes a blockchain responsible for recording information. There are two types of Blockchains; public Blockchains and private Blockchains. Public Blockchains rely…
It’s hard to hear the word “Blockchain” without thinking of Bitcoin. But can you name other companies also implementing Blockchain in their business operations? Do you think this technology is just relevant in fintech, or are there other use cases also? The Fundraising Regulator…
