Fork Definition
A fork in the context of blockchain technology refers to a situation where a single cryptocurrency divides into two, producing a second parallel version of the cryptocurrency’s underlying codebase. It results in a divergence from the original blockchain protocol, creating two separate and parallel blockchains that will continue to exist simultaneously.
Fork Key Points
- A blockchain fork results in two different versions of a cryptocurrency’s underlying protocol existing at the same time.
- The types of forks include Soft Forks and Hard Forks, which have different implications and effects on the blockchain network.
- Forks can be planned by the development team while some occur organically due to differences in consensus or strategy among network participants.
- Cryptocurrencies created through a fork process often strive to add new features, fix issues, or change the governing rules of the original currency.
What is a Fork?
A fork primarily occurs when the rules of a specific cryptocurrency or blockchain need to be changed, updated, or improved. This can happen as a result of a planned upgrade or due to a disagreement within the crypto community. When the existing code of a blockchain is modified and split, the blockchain branches off into two separate paths or forks.
Why Does a Fork Occur?
Forks can happen for a variety of reasons. Planned forks are usually enhancements, initiated by developers to add new features or to better the security of a crypto protocol. However, divisive forks often occur due to disagreements within a blockchain community about future development paths, security concerns, or ideological differences.
When Does a Fork Happen?
A fork happens any time changes are made to the rules of a blockchain network, either to its protocol or software. The action of initiating a fork does not happen in a vacuum, the community’s agreement and majority consensus are necessary elements for a successful fork.
Where Does a Fork Take Place?
Forks occur directly within a blockchain ledger. When a fork is successful, it effectively creates a new branch within the blockchain, and the transactions within the new branch follow a new set of rules.
How Does a Fork Work?
Nodes within a blockchain network typically follow a certain protocol. When changes are proposed, the nodes must choose whether to adopt the new protocol or stick to the original one. If the majority agrees to the new protocol, a hard fork can occur, creating a new chain. In the case of a soft fork, only a temporary split happens, with the chains converging once consensus is reached.
