● Beginner Crypto Basics

FORKS: What are they?

5 minutes 3 years ago

What is a Fork?

A ‘Fork’ in the most basic sense, is an alteration of a blockchain’s protocol which is used to determine if a transaction is valid or not. This results in a Hard fork or a Soft fork. Both of which produce different results for the coins in question.

Forks tend to occur when the developer’s of a blockchain decide something fundamental about it needs to be changed, or the user base of a currency or project, would like to see it evolve in a different direction. Forks often have a large impact on the coin and network, and can sometimes result in an alternative currency being created. A fork, in the context of software development, is a copy of a repository that allows for independent development. It is typically used when a developer wants to make changes to a project without affecting the original version. Forks also enable collaboration as multiple developers can work on their own versions of the repository and merge their changes back into the main project if desired. Additionally, forks provide a way for developers or individuals to contribute to open source projects.

Hard forks and Soft forks:

Hard forks and soft forks do practically the same thing: they change existing code on a blockchain. Both forks create a split on said blockchain when this occurs; however, soft forks are backwards compatible, whereas hard forks create two separate blockchains. Hard forks and soft forks are two different methods of introducing changes to a blockchain network. A hard fork occurs when a new version of the blockchain is created that is not compatible with the previous version. This can result in a split in the network, with some users continuing to use the old version and others adopting the new version. On the other hand, a soft fork introduces backwards-compatible changes to the blockchain, meaning that users who have not upgraded to the new version can still participate in the network. Both types of forks can have significant implications for the network's consensus and governance.

Example: Bitcoin Cash

Bitcoin Cash is an example of a hard fork. Bitcoin Cash does not operate on the same blockchain as Bitcoin, but rather on a parallel one. They will both continue to create blocks, but they will not be on the same network. Essentially, this means that once the fork has been created, the original blockchain will continue on the path it was already following, while the second blockchain will follow a new path with a new set of rules. Bitcoin Cash was created when a group of developers disagreed with the direction of the original Bitcoin and decided to create a new version with larger block sizes. This resulted in two separate cryptocurrencies, Bitcoin and Bitcoin Cash, with different communities and development teams. In contrast, Ethereum's Constantinople upgrade is an example of a soft fork, as it introduced new features and improvements without creating a separate cryptocurrency.

A soft fork will still operate on the same blockchain but may change a rule in such a way that it is still compatible with that network's rules. Normally, these soft forks will not produce a separate currency for the holders of the coin compared to hard forks. This upgrade was implemented to enhance the scalability and efficiency of the Ethereum network. By introducing features like reduced transaction fees and improved smart contract functionality, Constantinople aimed to improve the overall user experience and attract more developers to the platform. Unlike a hard fork, this upgrade did not lead to the creation of a new cryptocurrency or result in a division within the Ethereum community.

Example: Bitcoin Segwit Update

The SegWit upgrade to the Bitcoin blockchain is a good example of a soft fork. The SegWit upgrade occurred in 2017 and was activated in order to improve Bitcoin's scalability and flexibility. This was done without creating a new token or blockchain. The Bitcoin Segwit update was another example of a soft fork upgrade. It was implemented to solve the issue of transaction malleability and increase the block size limit. By separating signature data from transaction data, Segwit reduced the size of each transaction, allowing for more transactions to be included in a block and improving the overall efficiency of the Bitcoin network. This upgrade was widely supported by the Bitcoin community and did not result in a split or the creation of a new cryptocurrency.

What to keep in mind regarding forks:

It is important to keep up-to-date with the news surrounding the coins or tokens that you hold. If a hard fork occurs without your knowledge, you may either not receive coins that you are potentially entitled to or receive a shock when receiving new coins deposited into your wallet. What to keep in mind regarding forks is that not all forks are created equal. While some forks, like the Segwit upgrade, are implemented to improve the functionality and efficiency of a cryptocurrency, others can result in a split and the creation of a new cryptocurrency altogether. Additionally, it is important to stay informed about upcoming forks and understand the potential impact they may have on your holdings and the overall market. It is always recommended to exercise caution and conduct thorough research before participating in any fork-related activities.


Forks of all kinds are extremely important to the longevity of any crypto project. They allow coin developers to update their networks and systems in response to the needs of the currency or project and respond to feedback from the community and its users. Forks allow developers to integrate new technology when it is created and ensure that this can be done without a centralised body, which allows the space to maintain its decentralised nature. Forks in the cryptocurrency world serve different purposes, with some aiming to enhance the existing system and others leading to the birth of entirely new cryptocurrencies. To safeguard your investments and grasp the broader market implications, staying updated on upcoming forks is crucial. Engaging in fork-related activities should always be approached with caution, and thorough research is highly advised to ensure informed decision-making.

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