What is a Fork in Cryptosphere?


The term “fork” has several meanings and can mean a “branch” or “split.” More broadly, it means the use of the software project code base as the basis for another project.

In the context of the cryptosphere, a fork means the creation of one cryptocurrency on the basis of another (for example, Litecoin is a fork of Bitcoin). 

In other words, one blockchain (usually the Bitcoin network) is copied, some changes are made to it, and a separate new network is launched and a new cryptocurrency is issued.

In a more narrow sense, the concept of a fork is interpreted as a change in the basic rules of network construction, according to which blocks are considered authentic.

What is a fork in cryptosphere?

Types of forks

Forks that change the rules of how the current network works are divided into soft forks and hard forks. In the former, the changes in the code are minor; in the latter, the changes are significant and may contradict the old rules.

Soft fork

A soft fork is a network update that is compatible with its old version. Soft forks do not bring cardinal changes into the system, do not require software updates and are accepted by a majority of the members of the network.

One of the most famous soft fork of the Bitcoin network is called SegWit (Segregated Witness). The update was adopted in the summer 2017 and increased network bandwidth.

Hard fork

A hard fork is an update that is incompatible with the old version. As a result, there is a split in the network and users/miners have to choose which branch they will support. After the hard fork, there are two options: one of the branches dies (is not supported), or they continue to coexist independently, while having a common history up to the block on which the diversion occurred. An important point is that the hard fork of the network does not always mean the emergence of a new cryptocurrency.

User-activated softfork (UASF)

UASF (user-activated soft fork – soft fork activated by users) is a network update done by the users. An example can be considered the activation of the BIP 148 Protocol, which enabled SegWit soft fork. However, at the moment, this method of accepting updates is not very common, and can also be boycotted by large miners – they can unite against such an update, preventing its implementation.

The most famous hard forks

The most famous hard forks occurred in Ethereum networks in the summer 2016 and Bitcoin in August 2017.

The Ethereum hard fork divided the network into Ethereum (ETC) and Ethereum Classic (ETC). Part of the community reacted negatively to the network changes to solve the problem with the stolen money of the DAO project. Technically, the original network is the Ethereum Classic network.

As a result of the second hard fork, a new cryptocurrency, Bitcoin Cash, appeared, which differed from the original network by the increased size of the block. This hard fork gave rise to a series of similar branches with the formation of a new currency, but no one could repeat the success of Bitcoin Cash.

Crypto Assets

What is an Altcoin?

An altcoin is any cryptocurrency besides Bitcoin. If you divide cryptocurrencies by this feature, there are altcoins and Bitcoin. Some of the altcoins are the Bitcoin forks (but not all of them). Some are independent blockchains or forks of other cryptocurrencies (for example, Stellar – Ripple fork).

Fortrader contentUrl Suite 11, Second Floor, Sound & Vision House, Francis Rachel Str. Victoria Victoria, Mahe, Seychelles +7 10 248 2640568
Economic calendar
Time to start
Share on social networks