In this article, you will learn what does fork mean in crypto. Cryptocurrencies like Bitcoin and Ethereum are powered by decentralized, open software that anyone can contribute to called a blockchain. They're called blockchains because they're literally made up of blocks of data – picture a really long train – that can be traced all the way back to the first-ever transaction on the network. And because blockchains are open source, they rely on their communities to maintain and develop their underlying code.
What Does Fork Mean in Crypto?
Blockchain forks are essentially a split in the blockchain network. The network is an open source software, and the code is freely available. This means that anyone can propose improvements and change the code. The option to experiment on open source software is a fundamental part of cryptocurrencies, and also facilitates software updates to the blockchain.
A blockchain fork is essentially a collectively agreed upon software update. Blockchains depend on decentralized groups of computers all working collaboratively. Each individual computer, commonly referred to as a “full node,” runs the software needed to verify the blockchain's public ledger network secure. The more full nodes that concurrently run the software, the more secure the network.
A fork happens whenever a community makes a change to the blockchain's protocol, or basic set of rules. When this happens, the chain splits — producing a second blockchain that shares all of its history with the original, but is headed off in a new direction .
Why is Fork in Crypto Important?
Most digital currencies have independent development teams responsible for changes and improvements to the network, much in the same way that changes to internet protocols allow web browsing to become better over time. So sometimes a fork happens to make a cryptocurrency more secure or add features .
But it's also possible for the developers of a new cryptocurrency to use a fork to create entire new coins and ecosystems.
Soft fork: Think of a soft fork as a software upgrade for the blockchain. As long as it's adopted by all users, it becomes a currency's new set of standards. Soft forks have been used to bring new features or functions, typically at the programming level, to both Bitcoin and Ethereum. Because the end result is a single blockchain, the changes are backward-compatible with the pre-fork blocks.
Hard fork: A hard fork happens when the code changes so much the new version is no longer backward-compatible with earlier blocks. In this scenario, the blockchain splits in two: the original blockchain and new version that follows the new set of rules. This creates an entirely new cryptocurrency – and is the source of many well-known coins. Cryptocurrencies like Bitcoin Cash and Bitcoin Gold evolved out of the original Bitcoin blockchain via hard fork.
Bottom Line
Forks are an absolutely vital part of what makes cryptocurrencies able to evolve as fast as they do. Forks allow for fresh ideas that can help make a crypto more viable to use on a daily basis, along with other features such as security and privacy. This The article is about what is the meaning of fork in crypto.
