Fork

Fork

In the context of cryptocurrencies and blockchain, the term "fork" refers to a situation where an existing blockchain network is split into two distinct versions. This division occurs when there are significant disagreements in the developer community or users regarding blockchain rules and protocols.


There are two main types of cryptocurrency forks:

1. Hard Fork: In this type of fork, the changes implemented in the blockchain are so significant that the new rules are not compatible with the previous version. This results in a complete fork, with the creation of a new blockchain separate from the original. All nodes that do not upgrade to the new version will not be able to validate transactions on the new blockchain. Pre-fork cryptocurrency holders usually receive an equivalent amount of the new currency created by the fork.

2. Soft Fork: In this case, the changes introduced are compatible with the previous version of the blockchain. This means that nodes that don't upgrade will still be able to validate transactions on the new blockchain. The new rules are stricter, and blocks that don't follow these rules are considered invalid by the updated nodes. It's called "smooth" because the network stays together, but only updated nodes can validate certain transactions.


Forks can happen for a variety of reasons, such as fixing vulnerabilities, protocol improvements, philosophical disagreements, community disputes, or fundamental changes to the blockchain structure. After a fork, the two networks may go their separate ways, each with its own community of users, developers, and goals.

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