Cryptocurrency Forks: Solution or Problem?

Cryptocurrency forks were introduced a long time ago to modify a blockchain.

In recent years we have heard of forks that have occurred on some cryptocurrencies.

Among the most famous is surely the one that happened on bitcoin which saw the most forks.

But why do cryptocurrency forks occur and why only in some?

What is a fork

A fork is a practice that allows a modification to the source code of a cryptocurrency.

That is, if a stability problem occurs on a network and the community wants to improve the system, a fork is used.

But not only also how much problems occur in the community such as what happened in Ethereum.

Obviously, in order to proceed to the fork, the whole community must approve and consequently validate it.

There are two types of cryptocurrencie forks:

  • The Hard Fork
  • The Soft Fork

What are these two types of updates and how do they work?

Hard Fork

cryptocurrency forks with the blockchain division

The hard fork is a heavy fork that occurs in a given cryptocurrency.

It consists in dividing the blockchains into two and creating a new cryptocurrency and therefore a new blockchain.

That is, for example, the fork of Bitcoin Cash has meant that two cryptocurrencies were created with two different blockchains.

This practice is carried out when the modification could not be done as it would modify the entire structure.

In the case of Bitcoin cash, the change consisted in increasing the block size which is fixed in bitcoin.

So the only house to do was a hard fork.

Furthermore, given that the two blockchains are connected to each other even if different, derivative tokens could also be had.

That is, those who held Bitcoin in their wallet also received bitcoin cash due to the fork.

Obviously the price is not connected and therefore the crypto that undergo a fork are not affected by the price.

A soft Fork

Instead, a lighter practice is that of the soft fork that gives us the idea from the name itself.

This method consists of modifying a blockchain so a code arises in a less brutal way.

That is, simply in a block not yet extracted (validated), the modified code is inserted.

When the block is reached by the validators and then confirmed, the code changes the blockchain structure.

This practice is almost always used in all cryptocurrencies, a striking example is Ethereum.

In fact, ethereum is about to move from a POW system to a POS that obviously allows the modification of the blockchain structure.

The technicians prepared this step without making a hard fork with just a series of network updates.

These updates allow you to slowly change the entire structure in a very simple way.

Obviously it will take some time but it won’t be hard to divide the two blockchains.

Cryptocurrency forks

Many forks were made on cryptocurrencies and many were crypto created and then disappeared.

Just think that only on bitcoin, more than 10 and more 10 derived tokens occurred only in hard fork.

cryptocurrency forks especially those on bitcoin

Without thinking about the light updates that a cryptocurrency undergoes throughout its history.

This is because times change and ways of thinking lead to a change in the management of a system.

Keeping up with a cryptocurrency is very important because it promotes its adoption.

Obviously many tokens that were born do not have functionality but were created to take advantage of, for example, a positive moment of a mother cryptocurrency.

It is no coincidence that in 2017 in full bubble most of the hard forks occurred to take advantage of the excellent moment of the big coins.

But what about the derivatives?

There are many and many that fail, just think of bitcoin cash which despite being in the top 10 is in constant attack.

In one year she underwent 3 attacks at 51% and she also has a very long mining time, making her disadvantaged by the miners.

This is just an example, but there are others that I cannot list now, otherwise I will write a book.

But do cryptocurrency forks make sense?

A very important question is above all that I have been asking myself for a long time is that if it makes sense to fork.

Obviously, before answering this question it is appropriate to see in what state a cryptocurrency is.

For example, bitcoin cash in my opinion was only a market speculation because a block size cannot be increased with a POW system.

In fact, the situation for BCH is not going well and the data is confirming it.

Instead taking ethereum the situation is very different because an entire system is being created on it.

This system like DeFi needs a lot of speed and scalability which ethereum doesn’t have.

Then making updates to allow this cryptocurrency to achieve these goals changes the situation.

It is therefore not a question of speculation, but it is a question of improvement and therefore of innovation.

With these two examples I answered the question above simply by saying that it depends on the cryptocurrency and its use.

Cryptocurrencies that have no sense of being and that have no concrete use therefore have no market value.

In my opinion, these cryptocurrencies are better to stay away from them and therefore do not take them into consideration if not to learn from the situation.

Conclusion

In this article I wanted to talk a little about updates for crypto, that is, the very common and widely used practice fork today.

Some crypto are subject to continuous forks, see for example bitcoin this because there is continuous speculation about it.

But some have a real need for updates that would compromise their long-term use.

Exemplary case and Ethereum.

My advice is always to continue researching a certain situation that has occurred in a cryptocurrency.

And think with your own mind about why it occurred and don’t stop at the information of the first person who passes by.

For this article, everything is waiting for you.

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