what is Crypto Fork and how does it work ?

 

If you are new to digital currencies, you will probably come across terms that mean different things inside and outside the blockchain world. One of these terms is fork, which in the physical world probably reminds you of fork and spoon! The problem becomes more complicated when we add hard fork and soft fork to this set of terms and try to guess their role in the blockchain. If you have trouble understanding the concept of forks and the role of forks in the blockchain, read this article from CoinMarketSIG .

First, it is better to be acquainted with the meaning of fork in software. The term fork in open source software development is used to refer to the division of a project into two or more versions that usually do not follow the path of the original version of the project and do not go through it. In fact, by copying the source code of a project and making changes to it, a new program emerges from the heart of the previous program. In blockchain, which is a kind of software protocol, fork leads to “blockchain splitting”; Circumstances in which the blockchain is divided into two different chains, each of which follows its own consensus rules.

This method is often used when a specific group or project team wants to launch a new path or a new version of software at the same time. The forks we describe in this article are forks that are used either to change the rules of consensus, or to enforce new rules in the same blockchain.

Simply put, a fork is one way to upgrade, modify, and upgrade a blockchain that changes the original network code or protocol. Some of these changes are compatible with the previous protocol, which we call soft fork and others because fundamental changes in the function of the blockchain that are incompatible with the previous protocol. These forks are called hard forks.

 

What is a fork?

As you probably know, the information stored in the blockchain cannot be changed, and when a blockchain starts operating, no one can stop it until its users accept it. In each digital currency, programmers set a set of so-called protocols, and a blockchain continues to operate based on the same protocol and rules forever.

For instance, some of the basic rules of the Bitcoin network include the following:

• The time of each block is 10 minutes;
• Each block has a capacity of 1 MB;
• The total supply is 21 million units.

However, if someone is against the rules of Bitcoin or any other digital currency and wants to create their own version using the original blockchain code, how does he do it? If a digital currency, bug or security breach is detected in the network that threatens users’ assets, how can it be fixed? What if we need to make changes to the blockchain code to increase the capabilities of a blockchain?

The solution is simple. Updating or creating a new blockchain called a fork. When a group of programmers is dissatisfied with the terms and conditions of a digital currency, or when the network has problems that need to be solved, they have a solution called a fork.

 

Forks can be applied backwards compatible or backward incompatible in the network. In short, the term fork is just a term for when a piece of software or a protocol is updated. In the field of digital currencies and blockchain, forks occur when the network is divided into two parts.

The concept of fork in software science is different from the concept we consider in the blockchain. In software science, any software project created from the open source code of another project is considered a fork; but in the world of blockchain, we only use the term fork for projects that have made changes to a chain or split it into two parts. By this definition, a bitcoin cache blockchain (which directly changes the bitcoin protocol) is a bitcoin fork, but a Litecoin blockchain (built separately from the original bitcoin blockchain and using only bitcoin source code.) Is not considered a bitcoin fork.

 

What causes forks to occur?

Fork is a way to update or upgrade software, add new features, enhance existing capabilities, and upgrade security protocols in a decentralized world. Since Blockchain is a decentralized, distributed network, we cannot easily upgrade it like a company’s home computers or servers. However, this update should also be applied to the software of all or part of the main network players (nodes).

When the rules are changed and activated, the blockchain becomes a fork. These rules are changed in a specific block number (Block height) and the new chain history (forged or updated) in that; block number is separated from the old chain history.

 

The main scenarios that lead to a fork occur are the following:

Fork as a solution to technical disputes

When developers, founders, or even influential people in a blockchain ecosystem disagree over network technical issues, forging a blockchain and creating a new chain is one possible solution.

Bitcoin Cache (BCH), for example, is one of the bitcoin forks that was launched in 2017 due to widespread disagreement about the scalability of bitcoin. Dissatisfied with the speed and fees of transactions, a group of large Bitcoin developers and miners introduced extensive blockchain rules and increased the block size (from 1 MB to 8 MB) to introduce a blockchain and a new version of the protocol.

Also in 2018 (one year after the Bitcoin Cash fork), the community of Bitcoin Cash users and developers split into two groups, with a group (led by Craig Wright) proposing to remove the blockchain and re-apply some of Satoshi’s technical capabilities. Nakamoto (creator of Bitcoin), who was removed from the Bitcoin protocol by later developers, created another fork, which in turn created the blockchain and the new digital currency BSV (Bitcoin Satoshi Vision).

Recover lost amounts, through forks

Sometimes, due to technical bugs in the China Blockchain protocol, or the decentralized applications built on it, a large portion of users’ assets is lost to hacking attacks. In such a situation, the main network developers may prefer to eliminate fraudulent transactions and return the funds by making changes to the blockchain.

Of course, such a decision is by no means simple; because removing a transaction or a block from a blockchain is like manipulating or censoring centralized networks, which could call into question the blockchain philosophy. However, this has already happened in 2016 for the Ethereum blockchain.

In 2016, after the DAO hack and the loss of millions of dollars in user capital, the Ethereum community of developers and founders was forced to provide a fork in order to gain public trust. Although the fork was widely criticized, with Vitalik Butrin’s support, the decision was eventually implemented, and most users migrated to the new network. The forged version of Ethereum (thanks to the support of the core members and the majority of users) retained the name Ethereum (ETH) and changed the name of the old version of the network to Ethereum Classic (ETC), whose digital currency is still traded in the market and has its own fans.

Network fork to update and add new features

A blockchain network needs technical updates over time to both protect the network from impending dangers and enable new capabilities. Since these updates require protocol changes, a network fork will be required. Yet, such forks are often done with the consent of the majority of users and developers on the network, and in practice, the blockchain is redirected instead of branching.

The SegWit update that was made on the Bitcoin network in 2017 is an example of these forks. Segregated, which stands for Segregated Witness, is actually a bitcoin improvement project that was implemented to address two major issues. The purpose of this fork was primarily to provide conditions to protect the flexibility (Malleability) of transactions and in the next step to increase the block capacity (Block Capacity) in the bitcoin blockchain network.

Network fork in order to divide the consensus

In some blockchains, forks are used to divide the power of the network consensus between parallel multi-chains. In fact, in such cases, the blockchain is divided into several parallel and coordinated chains to increase the scalability and speed of transaction approval, each with its own validation. This method, which is to be used in the second version of Ethereum (Ethereum2.0), is called Sharding. These types of forks do not divide the main chain rules and the user community; but in terms of implementation structure, they are considered forks.

Another type of fork is heterogeneous Sharding, which is used in third-generation blockchain such as Polkadot. In heterogeneous Sharding, the network is initially divided into several parallel chains by consensus rules and separate validations. Each of these chains is called a shard or parachute, which is designed for a specific application and to run a decentralized program. This initiative actually prevents the creation of forks in the blockchain; yet its structure is derived from the concept of fork and the branching of the main chain.

 

In conclusion

Although there has always been a lot of criticism of forks throughout the history of digital currencies, we have to admit that forks are good for the digital currency community as a whole. In fact, advances in the field of digital currencies are taking place step by step, and for now, the only way to apply these advances are forks. In addition, the forks make the voices of all members of this community and their criticisms and suggestions heard by the developers. Do not forget that the developers and founders of the project are only part of this puzzle. To upgrade a blockchain, various groups, from network nodes to regular users and wallet servers, must support the proposed changes and agree on the details. Ordinary users and investors are not unlucky with the effects of forks. As we explained, changing the code can be like disrupting a big game; as we live in an age where code is the law.