What is a Fork?
The meaning of a fork is best described by the word “crossroads”. It is a way to create a new version of a blockchain or change the protocols that govern its operation. New cryptocurrencies can also be created during a fork.
Forks are divided into two categories: hardforks and soft forks.
During a hard fork, a new version of a blockchain is created, and both independent blockchains then live their own lives – the original blockchain with the original protocol and the new blockchain with the modified protocol will remain in operation. A hard fork is not backwards compatible.
In the case of a soft fork, only the current functioning rules of the blockchain are modified. Soft forks are mainly used to implement new features. This change happens more often and is backwards compatible.
Hard Fork and Soft Fork examples
For example, the Bitcoin blockchain split in 2017, creating a hard fork called Bitcoin Cash. Another example is Ethereum, which gave rise to the Ethereum Classic hard fork.
An example of a soft fork is the adoption of SegWit, which changed the Bitcoin blockchain code. This change was made so that it was possible to get 8x more data into one block, thereby multiplying the entire blockchain transaction efficiency many times.
Forks usually take place when there is no 100% agreement about the development and part of the community wants to break away. There may be many reasons for this and among the most common are the implementation of repairs and patches to increase protection and security, adding new functionalities, or creating new cryptocurrencies.