What is a Blockchain Fork?

What is a Blockchain Fork?

A fork is a crucial turning point when the protocol rules of a blockchain undergo a significant and typically irreversible change, resulting in the emergence of two independent chains, each with its own transaction history and unique features. We will examine the various aspects of cryptocurrency forks in this extensive tutorial, including their forms, causes, and potential repercussions.

Types of Forks:

Hard Fork:

A hard fork is a significant and irreversible change to the protocol rules that underpin a cryptocurrency. A permanent divergence results from this transformation, with one chain conforming to the previous laws and the other to the new ones. Users that wish to continue using the network must update their software to conform to the requirements of the new chain. Technical updates, governance conflicts, or other causes within the cryptocurrency ecosystem can lead to hard forks.

When Bitcoin Cash (BCH) split from Bitcoin (BTC) in 2017, it was one of the most well-known hard forks in cryptocurrency history.

Soft Fork:

A soft fork is a protocol update for a blockchain that is backward-compatible, as opposed to a hard fork. Nodes that have not upgraded can still use the network despite the new, more stringent regulations that were applied by a soft fork. With this kind of fork, network-wide consensus should be easier to reach because upgraded nodes will adhere to the new regulations while non-upgraded nodes will continue to validate transactions. The Segregated Witness (SegWit) upgrade in Bitcoin is an illustration of a soft fork.

Reasons for Forks:

●      Technical Upgrades:

To add new features or technical upgrades to a cryptocurrency’s network, many forks are started. These changes may improve privacy, security, or scalability. For instance, a cryptocurrency may opt to perform a hard fork to increase the block size limit in order to support more transactions per block.

●      Governance Disputes:

Forks can result from disagreements within the bitcoin ecosystem, particularly between developers, miners, and consumers. Critical problems like block size, transaction costs, or general network governance may be at the center of these disagreements. Forks can sometimes happen because of disagreements over a project’s philosophical stance.

●      Network Security:

Additionally, forks can be started in reaction to security flaws. Developers may suggest a fork to patch the vulnerability and defend the network from potential attackers when a serious security fault is found. Forks with a security focus are often well-liked and uncontentious.

What Happens During a Fork:

1.      Creation of Two Chains:

A fork’s main result is the creation of two distinct chains: the original chain, sometimes known as the “legacy” or “old” chain, and the new chain produced by the fork. From the fork forward, these chains will have unique transaction histories.

2.     Distribution of New Cryptocurrency:

In most cases, holders of the original cryptocurrency receive an equal number of the new coins on the new chain. This is frequently referred to as a “fork dividend” or “airdrop.” For instance, you would have received a comparable quantity of Bitcoin Cash (BCH) if you had held a specific amount of Bitcoin (BTC) at the time of the Bitcoin Cash (BCH) hard fork.

3.     Decision-Making for Miners and Nodes:

By running the appropriate software, miners and nodes within the Bitcoin network must decide which chain to support. Usually, the chain that gains dominance is determined by the majority of members. Users’ consensus and variables like network hash rate and mining difficulty may have an impact on this choice.

4.    Community Response:

Within the bitcoin ecosystem, forks frequently spark vigorous debate and discussion. Users and investors may have diverse viewpoints regarding the fork’s benefits and the chain they decide to back. In the days preceding and after a fork, this may cause price volatility and uncertainty.

Potential Impacts of Forks:

●       Price Volatility:

Forks may cause the cryptocurrency in question to experience price volatility. Investors may buy or sell cryptocurrencies as a result of community unrest and uncertainty, which can create dramatic price swings.

●       Formation of New Coins

Forks frequently result in the formation of new coins with different features or applications from the original. The cryptocurrency environment may become more diverse as a result of these new coins, which may have their own communities and ecologies.


In the world of cryptocurrencies, forks are crucial occurrences that denote substantial modifications to a blockchain’s protocol regulations. Depending on how much support and approval they receive from the community, whether they are deliberate improvements or heated arguments, they can have a variety of effects.

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Jesse Rosenbalm
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Jesse Rosenbalm

Jesse Rosenbalm stands out in the crypto journalism realm, seamlessly blending intricate blockchain concepts with accessible prose. Known for his deep dives and accurate forecasting, Jesse's articles are a must-read for both novices and experts. As crypto trends shift, his insightful writings remain a beacon in the digital currency space.

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