What is Hard Fork in the blockchain?
February 27, 2019 1:29 pm,
Hard fork can be understood as a change that can happen in a blockchain technology leading to the development of a new protocol or version. It can also be said as an upgradation to the already existing version of blockchain. This can happen due to many reasons. The old version may be found insufficient or less secure. There might be any other reasons that make the already existing blockchain technology outdated. A latest version is developed, and all the users have to update to the newer version to access all the benefits. There are many examples of hard forks among famous cryptocurrencies and the most prominent are that of Bitcoin and Ethereum.
Bitcoin Hard Fork
The hard fork of bitcoin into Bitcoin and Bitcoin Cash has been one of the most significant forks of all time. Bitcoin Cash forked from bitcoin and is more advanced in some aspects when compared to the old version. The main issue tackled by Bitcoin Cash was the scalability. Because of the small size of the blocks, transactions took longer time to process. This led to the whole system becoming slower. To bring an end to the issue, Bitcoin Cash increased the block size in their version. Even the transaction fee is much less in Bitcoin Cash when compared to the older Bitcoin. The users have the complete freedom to adopt the new model or continue using the old one.
Ethereum Hard Fork
The hard forking of ethereum was mainly because of the DAO issue that took place earlier in the system. Hard Fork is irreversible as opposed to the soft fork. There is no way the users can access the benefits without updating to the latest version. The split of Ethereum resulted from the prospective solutions for the DAO scandal. There was huge disagreement within the platform that eventually led to the hard fork of Ethereum into Ethereum and Ethereum Classic. ETC is very much valuable and is currently in the fifth position in the cryptocurrency list. Both Ethereum and Ethereum classic is of importance in the digital arena.
Benefits of Hard Fork
A hard fork can lead to pretty drastic changes in the outlook and mechanism of the whole cryptocurrency. But there are ways for the users to benefit from this. During the time of fork, the number of coins held by the users nearly doubles. Selling these coins can result in prospective gains for the user. The forked cryptocurrency is usually sold as it takes some time to find out the place and value of the latest addition. But the best way to avoid forking as it is quite hard to sell coins that are forked. The main idea behind any kind of forking is to make a better version than that of the older model.