What is a Fork in Cryptocurrency?
A blockchain is a system where everything works by a certain list of rules. Whenever rules change, the blockchain starts branching, thus creating a fork. Why does this happen and what to do with this information? In this article, we will be talking about the phenomenon of forking in cryptocurrency and the calendar of the upcoming hard forks.
Planned and Unplanned Forks
Why does forking occur? There are numerous types of forks in the blockchain discourse. The easiest and least significant one is unplanned forks. Whenever two miners simultaneously find new blocks, the blockchain splits. However, this event doesn’t influence the coin price, neither does it last long: as a new block gets mined, the longer branch of the fork keeps growing, while the shorter gets abandoned.
The other type of crypto forks is planned forks, which in turn is divided into soft and hard forks. These happen on purpose and usually are the result of the protocol rules being changed by the participants. The code needs to be changed in order for a planned fork to occur, and the whole event is usually announced by the developers in advance. How exactly do soft and hard forks differ?
A soft fork is a kind of blockchain software update which isn’t compulsory for the participants to continue working with the said cryptocurrency. Even if you don’t update your program, your node will still be recognizing new blocks as valid, the only thing you’re risking to miss being new features and functionalities.
Soft forks can be either ‘miner-activated’ or ‘user-activated’. An example of a soft fork occurring on the Bitcoin blockchain would be BIP141, activated in August 2017: while the majority of participants have updated their protocol software, the minority who have chosen to keep the old software still can use the crypto.
A hard fork, on the other hand, is a whole other story, making the old and the new software mutually incompatible and forcing all participants to update. Should a hard fork occur, two outcomes are possible. In the first case, all participants agree to update the software, the older version of the blockchain simply ceasing to exist. In the second case, some of the users refuse to upgrade the software, thus enabling the two branches of the fork to exist simultaneously and basically creating two cryptos instead of one. For example, in 2016 some of the Ethereum full node owners kept the older software, sticking to the old chain, which now has the name of Ethereum Classic.
Upcoming Cryptocurrency Forks
For the rest of the year and the following year, a number of hard forks have been planned. This is the list of the upcoming forks as of October 2019:
On September, 26, a hard fork for Qtum (QTUM) has been announced. The release is planned on October, 17. The fork is supposed to ‘reduce long block spacing and increase the blocks per day, giving staking wallets a 12.5% raise’.
Aeon (AEON) has announced a new software release on October 25, claiming there would be ‘numerous protocol and implementation improvements’.
Another October release will be a hard fork for Aeternity (AE), which is scheduled on October 30.
On November 11, a hard fork release for GoldCash (GLD) is planned. “Our Core Team is currently working with Bittrex, pools, and other exchanges to ensure a smooth and successful deployment”, states the official Twitter account.
A hard fork for Monero (XMR) is planned on November 30th.
The other three of upcoming hard fork November releases don’t have estimated dates yet, but there is definitely something planned for Aergo (AERGO), LUXCoin (LUX), and Callisto Network (CLO).
As for December, Beam (BEAM )has promised a PoW algorithm change. Meanwhile, Wanchain (WAN) is planning to release Galaxy Proof of Stake until the end of the year.
The hard fork upgrade Grin (GRIN) team is developing is in progress, but the release is expected on January 15.