What is a fork?

What is a fork?

Bitcoin is open-source software, so anyone can duplicate, modify and use it at their discretion. Actually, a modification of the source code is called a fork.

A fork is an event in a project that implies that part of it will be separated into another project, copying the source code and modifying it to create another blockchain. For example, the Litecoin cryptocurrency is a “fork” of Bitcoin because its developers copied the BTC code, made a number of changes, and launched a new project.

Fork of Bitcoin software is complicated because every user working with the system must maintain compatibility with the network, otherwise, miners may start working on the wrong chain.

In other words, any fork is a change in the rules by which a block in the blockchain is recognized as genuine (valid).

Types of forks

At the moment, there are several main varieties. The first is the soft fork, which implies minor changes. The next one is a hard fork, that is, more rigid and cardinal.

What does soft fork mean?

In the case of a soft fork, changing the rules does not require updating the client to execute the new rules. If some of the nodes in the network do not accept the new rules, such nodes will still be able to interact with nodes that use the new rules. This change is backward compatible, as older versions of the software recognize new blocks.

While hard fork implies that all miners will update systems and apply new rules, a soft fork requires only most nodes to update and agree on a new version.

For a better understanding, you can draw an analogy with the languages: if, before the fork, all nodes spoke American English, and the new rules require switching to the British version, then nodes that continue to use the American version will still be able to understand British. At the same time, sites that use British English will easily understand the American version.

Soft forks were the most common way to update the BTC blockchain, as they are said to carry a lower risk of network separation. Some examples of successful soft forks are software updates, such as BIP 66, which deal with signature verification, and P2SH, which have changed the formatting of Bitcoin addresses.

What does hard fork mean?

The hard fork is a completely different version of the code that divides it into two separate parts: old and new. At the same time, both parts simply cannot physically interact.

Hard fork involves changing the consensus mechanism itself, in which case the entire network is divided into two parts that can never again interact. This is because blocks recognized as valid in one part will not be considered as such in another.

If you follow the same analogy with languages, the old nodes speak English, and the new ones speak Chinese.

How to distinguish between fork and altcoin?

The concepts of forks and altcoins are not yet fully defined. This means that to the same crypto both terms can be used at once.

In general, altcoins are all crypto coins except the first one.

Ideally, the altcoin is a project that is completely different from the original Bitcoin. This should include Dash, Ether, NXT, etc.

But forks are really clones that were created as copies with minimal and often useless improvements. As an example, Dogecoin. By the way, it is a fork of a fork.