Fork Blockchain and Bitcoin: what it's all about


Fork Blockchain and Bitcoin: what it's all about

The world of cryptocurrency is a dynamic world and constantly evolving, thanks to its advanced technologies that keep changing to improve and adapt to the future.

It is a continuous metamorphosis, and over the past decade, both Bitcoin which Ethereum have gone through several transformations, known as "Fork", a phenomenon that has always influenced the cryptocurrency landscape.

To understand what is meant, it is necessary to know that Blockchains, the beating heart of these digital currencies, follow codified guidelines that govern the process of validating transaction blocks and maintaining consensus among nodes.

And it is precisely these guidelines that can be modified to implement updates, protect the community from potential threats, or even to introduce new cryptocurrencies.

In the following article, we will give a precise explanation of what is meant by Fork Bitcoin o Fork Blockchain, taking as an example one of the most well-known cases: the Bitcoin Cash Fork.  

What is meant by Fork

With the term "Fork" in the context of cryptocurrencies refers to the process in which the community of a cryptocurrency project is divided into two or more blockchains following a significant change in the underlying protocol.

The blockchain Fork, as a whole, thus represents the protocol update process or of the code of a cryptocurrency. This can happen when the community cannot agree on the consensus algorithm and transaction validation rules.

This creates distinct sections in the blockchain, thus introducing new dynamics and rules. Bifurcations, in turn, can also lead to the creation of new tokens.

The whole system can take place through the creation of a new network from scratch, as in the case of Litecoin, or by bifurcating the existing blockchain, as in the case of Bitcoin Cash, where divergent views on the direction of bitcoin have given rise to a new cryptocurrency.

Generally speaking, a new bifurcation can give rise to two distinct kinds of Fork: thel soft and hard Fork.

Hard Fork and Soft Fork

When dealing with a new bifurcation, you may be faced with either a soft Fork or a hard Fork. The two are types that represent the degree of change that the code has undergone, whether massive or lighter.

In particular, hard Fork implies a radical change in software, requiring all users to upgrade to the latest versions.

The nodes that persist with the previous version Are no longer accepted in the new version and this results in a permanent divergence from the previous blockchain.

Sometimes, however, a lack of unanimous consent can be encountered, and this can lead to the Coexistence of two blockchains Using variants of the same software.

On the other hand, the soft Fork is presented as a backward compatible solution. The updated blockchain is responsible for approving transactions, but outdated nodes continue to consider new blocks as valid.

However, this backward compatibility is unilateral: the updated blockchain does not recognize outdated nodes. To ensure the effectiveness of a soft Fork, the majority of miners must therefore adopt the new rules, increasing post-bifurcation network security.

Soft Forks, as used in the Bitcoin and Ethereum blockchains, often aim to implement software updates such as BIP 66 in the case of Bitcoin.

On the other hand, the Hard Fork, with their retroactive incompatibility, require a mandatory upgrade to the latest version of the software to continue to actively participate in transaction validation, leading to a Final break in the blockchain.

Bitcoin Cash Fork: an example

One example of hard Fork Bitcoin that is being talked about a lot is the Bitcoin Cash (BCH), which has emerged in the cryptocurrency landscape with considerable impact. It was born during the forced hard Fork of the August 1, 2017, breaking away from the Main blockchain.

This is a bifurcation that introduced a significant increase in block size, going from 1 MB to 8 MB, a move that was necessary to make network bandwidth more powerful and to lower transaction costs.

At the time of the passage and creation of the Hard Fork, Bitcoin holders received an equivalent amount of BCH in their wallets, so this was the moment of the birth of a new network.

In a very short time, Bitcoin Cash has positioned itself as one of the most relevant and successful Blockchain Forks, enabling a Superior transaction processing speed and handling a larger volume than the original Bitcoin network.

However, it is crucial to point out that despite these advantages, Bitcoin remains the preeminent cryptocurrency by market capitalization, with BCH holders likely to experience lower liquidity and value than their original counterpart.

The new network also implemented a protection mechanism against parallel transactions in the two blockchains, and all of this participated in ensuring the stability and security of cryptocurrency.

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