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Bitcoin Forks: What Exactly Are Blockchain Forks?

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Bitcoin Forks: What Exactly Are Blockchain Forks?

A fork happens whenever the engineers and developers in charge of a network make changes to its protocols.

Blockchains as their name implies, are blocks of data held together and powered by decentralized software that allows anyone on the network to contribute to it. 

This chain of data blocks is more like a digital ledger in which details of transactions are constantly added, and can be traced back down to the first-ever transaction ever handled.

When forking happens and the protocols of this chain are changed, a new branch of the chain appears, that shares the same history as the original blockchain, right until the time of the split. 

Only that this new branch has a different future and destination from the original. This new branch is also known as a fork.

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Why Are Forks Important?

Forks are created as an improvement to the original chain, making the network more secure, reducing fees, and improving scalability while adding other features. Forks can occur for several reasons including

  • Security Upgrades
  • Security Issues
  • Scaling
  • Changing the network’s consensus algorithm

Sometimes, forks in a network aren’t created for the improvement of the original chain at all. In this scenario, forking is used to create entirely new networks. The main way to create new chains and tokens is to either create them from scratch or to fork an existing chain.

After forks occur, it is now up to users to decide which network or chain to continue using. Some good examples of forked cryptocurrencies are, Litecoin and Bitcoin Cash, created as forks from bitcoin.

Understanding The Types Of Forks

Forks are classified based on how many changes are made to the original network. There are two types of forks.

Soft Forks

Soft forks are forking processes involving minor changes to the original chain. Usually, these forks are adopted by most users and the changes are accepted as the new standard for the network. 

Soft forks produce a new chain in which the new changes made to its protocols are compatible with the old versions. 

They are mostly used to introduce new features to a network or to scale up its security.

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Hard Forks

Hard forks, on the other hand, are forks resulting from major changes to an original chain’s protocols. After a hard fork, the new block is so different from the original, that both chains are no longer compatible. 

In this kind of fork, the original chain splits completely into two different chains, following a different set of protocols.

Hard forks create completely new cryptocurrencies that have very little similarities to the original.

The major difference between hard and soft forks is that soft forks do not lead to the creation of new cryptocurrencies.

Bitcoin Fork: How Does All Of These Come Together?

Like forking in general, bitcoin forks can be classified as hard bitcoin forks and soft bitcoin forks.

Over the years, multiple soft forks have been carried out on the original bitcoin chain, but the results of hard forks are the most popular because these hard forks create entirely new cryptocurrencies.

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After bitcoin’s creation in 2009, the Genesis Block was mined. The Genesis Block is the first block to have ever been created on the bitcoin network. And in the years following, several other networks have been created from the genesis block.

Some of the most notable being 

  • Bitcoin XT (The first-ever fork)
  • Bitcoin cash
  • Bitcoin Gold
  • Litecoin
  • Segregated Witness

What Does It All Mean

In under a decade since the creation of bitcoin, the network has been forked numerous times. Some of the cryptocurrencies created by these forks are popular to date.

It is very likely that more forks keep getting created, meaning that there is no predicting how many more descendants the original bitcoin chain might have in coming years.

Jim Haastrup is a freelance blockchain and metaverse writer. He helps founders, investors, startups, crypto, and blockchain enthusiasts connect with their audience and win investment through the written word.

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