What is blockchain fork

> 3 min. read
What is blockchain fork

Forks in the blockchain network are essentially a split in the network. The network is open-source software, and the source code is accessible for download. This means that anyone can make changes to the code and submit improvements. The ability to experiment with open-source software is a key feature of cryptocurrencies, and it also helps with blockchain software updates. When the software of separate miners becomes out of sync, forks occur. Miners must choose which blockchain to use in the future. If there isn't a majority conclusion, two copies of the blockchain may be created. Around such occasions, there may be periods of higher price volatility.

Forks work by making changes to the blockchain's software protocol. They're frequently linked to the generation of new tokens. The most common method for producing new coins is to start from scratch. Alternatively, the existing Bitcoin blockchain might be 'forked'. The most popular way is to create fresh tokens from scratch. This method entails 'copying and pasting' existing code into a new token, which is then changed and launched. The network must be built from the ground up, and individuals must be persuaded to utilize the new coin. Litecoin, which began as a clone of bitcoin, is an example of this strategy. People were persuaded by the creators' adjustments to the code, and it has now become a popular cryptocurrency.

There are two types of forks: hard and soft forks.

A hard fork is the process of creating bitcoin cash from bitcoin. A hard fork is a significant modification to the software that forces all users to upgrade to the most recent version. Nodes that are still running the prior version of the program will not be accepted in the new one. A hard fork is a permanent break from the previous blockchain version. If the new version does not receive unanimous approval, two blockchains could use a variant of the same software.

A soft fork, on the other hand, is backwards compatible. The improved blockchain is in charge of transaction validation. Nodes that aren't modified, on the other hand, will regard the new blocks as valid. This only works in one direction; nodes that haven't been updated will be ignored by the upgraded blockchain. The majority of miners must update in order for a soft fork to work. The network will be more secure after the fork if more miners accept the new regulations. Soft forks have been employed on the blockchains of bitcoin and ethereum, among others. They're commonly employed to carry out software upgrades (such as BIP 66 in the case of bitcoin).

© 2023 BITmarkets. All rights reserved.
Dark mode
Light mode

🍪 Cookies

We use cookies to store, access and process personal data to give you the best online experience. By clicking Accept Cookies you consent to storing all cookies and ensure best website performance. You can modify cookie preferences or withdraw consent by clicking Cookie Settings. To find out more about cookies and purposes, read our Cookie Policy and Privacy Policy

Cookies settings

Cookie Control

What are cookies?

Cookies are small text files that enable us, and our service provides to uniquely identify your browser or device. Cookies normally work by assigning a unique number to your device and are stored on your browser by the websites that you visit as well as third-party service providers for those website. By the term cookies other technologies as SDKs, pixels and local storage are to be considered.

If Enabled

We may recognize you as a customer which enables customized services, content and advertising, services effectiveness and device recognition for enhanced security
We may improve your experience based on your previous session
We can keep track of your preferences and personalize services
We can improve the performance of Website.

If Disabled

We won't be able to remember your previous sessions, that won't allow us to tailor the website according to your preferences
Some features might not be available and user experience reduced without cookies

Strictly necessary means that essential functions of the Website can not be provided without using them. Because these cookies are essential for the properly working and secure of Website features and services, you cannot opt-out of using these technologies. You can still block them within your browser, but it might cause the disfunction of basic website features.

  • Setting privacy preferences
  • Secure log in
  • Secure connection during the usage of services
  • Filling forms

Analytics and performance tracking technologies to analyze how you use the Website.

  • Most viewed pages
  • Interaction with content
  • Error analysis
  • Testing and Measuring various design effectivity

The Website may use third-party advertising and marketing technologies.

  • Promote our services on other platforms and websites
  • Measure the effectiveness of our campaigns

Manage Cookies

Crypto assets as unregulated, decentralised and highly volatile assets entail substantial risks and you may lose all invested capital.

Check Risk Disclosure for detail risk information.