by Aziz Zainuddin, founder and editor-in-chief of the The Crypto Master
Hard Forks are a unique event in the realm of digital currencies that has accumulated polarizing points of view within the cryptocurrency community. Some argue that the hard forks represent a negative force that creates division and chaos, while some believe that they represent a form of innovation and liveliness in the panorama of cryptocurrencies. Although there are merits on both sides of the argument, it is important first to understand the concept of hard forks and how they affect the world of cryptocurrencies.
Hard Fork: what is it?
Hard forks occur when the underlying source code of the blockchain is modified to improve a certain function. The blockchain technology was initially conceived as the technology behind Bitcoin, the first decentralized cryptocurrency ever created. In general, a blockchain is a ledger of distributed transactions, stored in & # 39; blocks & # 39; in which the data can not be changed. Each block is filled with thousands of different transactions that can go from someone who buys a cup of coffee using Bitcoin (BTC) to a hacker who illegally buys something from the dark web.
The rules of the blockchain have already been codified in its source code from day one, and any attempt to modify a particular feature requires a modification of the underlying codes. For example, developers may want to improve blockchain capabilities by increasing the capacity of transactions in a block. In these cases, a hard fork is needed to improve the functionality of the blockchain.
The hard gallows will produce a permanent division of the blockchain; the new and improved blockchain will be governed by the improved codes.
Categories of hard forks
There are three main types of fixed forks that include:
1. Scheduled hard forks
A programmed hard fork refers to an update that has already been mapped in the project roadmap and is publicly known. This update is similar to the software updates required by your smartphone apps. The planned rigid forks are well received by the community as it is an initiative to improve the capacities of the blockchain. In addition, the main developers and the community will seamlessly switch to the new chain unanimously, abandoning the old, less useful chain.
A prominent example of the planned fork is the third phase of the development of Ethereum, Metropolis, which aims to improve the security, scalability and privacy of the network.
2. Happy Forks
This type of difficult fork occurs because of internal disagreement within a project to solve a particular problem. As a result of the disagreement, a part of the community will move away creating a new chain, resulting from a modification of the underlying source code to improve certain features. Since this fork is not unanimous and is not supported by all community stakeholders, a new currency will be created together with the new chain.
Bitcoin Cash, created by those who believed that the problem of Bitcoin scalability was a growing concern and the best way to deal with it was to increase the size of the Bitcoin block from the default value from 1 MB to 8 MB.
3. Spin-off coins
Due to the open source nature of cryptocurrencies, in particular Bitcoin, its codebase is open to the public and can be modified to create a new currency with different characteristics. These spin-off coins can be created by almost anyone, by taking the underlying codes of Bitcoin and changing one or a few things to create a completely new coin.
An example of a derived currency is Litecoin, which was a bifurcation of the original Bitcoin. Litecoin had confirmation times of the quickest blocks and greater availability of coins.
A noticeable feature of blockchain technology is the premise of transparency and decentralization. This can be seen across the industry where the code base for most coins is open publicly for anyone to inspect and improve. Although it has tremendous benefits, it can also be a double-edged sword, since reaching full consensus on solutions to solve problems can be extremely difficult. In the case of Bitcoin, the creation of Bitcoin Cash was a representation of the diversity of perspectives on solving the main problem of scalability.
Furthermore, anyone can create a new currency by changing a particular feature of an open source currency. This can be seen from the huge amount of projects that come from a single code base; there are currently 27 Bitcoin forks. This equates to 27 different versions of Bitcoin, with the main currencies like Bitcoin Cash, Bitcoin Gold, Segwit2X and Bitcoin ABC. This is indeed the testimony of the community's innovation.
Chaos or innovation?
Based on the different categories of hard forks in the industry, we can see that hard forks can be good or bad for the general community. The hard, controversial forks can turn into divisive events for the community, but they can also be seen as a representation of the diversity of thoughts and innovation in the world of cryptocurrency. The decentralized nature of cryptocurrencies generates a strong form of empowerment for participants in the community, allowing them to choose the coins they would support based on their merits.
It must be said that with any difference in perspective, there are also some of which could be said to favor chaos and instability. Although this seems unfortunate, these differences continue to represent a manifestation of innovation that is abundant in the world of cryptocurrencies.