Page 7 - volume-12-4
P. 7

Underst anding

                              Crypt ocurrency

                              Fork s

                                                cryptoCurrency �ork is w hen a                                                                                          2 Types O� Fork                                                                                                                                             to change som ething to introduce som e

                              A cryptocurrency project’s developers                                                                                                                                                                                                                                                                 innovation.

                                                                                                                                                                                 1. Hard�ork

                              change the current blockchain, w hich creates

                              tw o di��erent coins. The �ork usually occurs                                                                                                                A hard �ork is a signi�icant change that                                                                                                           H ard �orks are controversial issues in the

                                                                                                                                                                                 occurs at the protocol level. It includes a                                                                                                        cryptocurrency com m unity because they can
                              a�ter som e dispute w ithin the com m unity

                                                                                                                                                                                 substantial upgrade to the core rules o� the
                              or disagreem ent over how to im prove their                                                                                                                                                                                                                                                           harm long-term investors. Users w ho ow n the

                                                                                                                                                                                 cryptocurrency or blockchain. Exam ples

                              blockchain.                                                                                                                                                                                                                                                                                           old coin m ight need help to sell or exchange it

                                                                                                                                                                                                                                                                                                                                    �or any new token or even know that there are

                                       Forks keep happening because                                                                                                                                                                                                                                                                 tw o versions o� the sam e coin. The users w ho

                                                                                                                                                                                 �  C reating a new hashing algorithm .

                              cryptocurrency has �undam ental aspects that                                                                                                                                                                                                                                                          ow n the new token m ight need to understand

                              m ake them inherently unstable. In particular,                                                                                                     �  C hanging the transaction size lim it.                                                                                                          w hy anyone w ould w ant to use anything

                              cryptocurrency is all about decentralization:                                                                                                                                                                                                                                                         besides a hard-�orked currency.

                              no m ajor party, no one can gain control o� a                                                                                                      �  C reating another token �rom the identical

                              netw ork. It m eans that i� one person or group                                                                                                              blockchain.                                                                                                                              2. So�t�ork

                              w ith m alicious intent controls a token, they                                                                                                                                                                                                                                                                  In contrast, so�t �orks are non-breaking

                                                                                                                                                                                           Signi�icant changes are generally
                              can destroy it or potentially take over all the                                                                                                                                                                                                                                                       changes that only involve som e rule

                                                                                                                                                                                 not expected by users and can lead to

                              other tokens. A �ork is som etim es an easy                                                                                                                                                                                                                                                           adjustm ents w ithin the existing blockchain

                                                                                                                                                                                 cryptocurrency netw ork instability and

                              w ay to resolve disputes: i  one party can’t get                                                                                                                                                                                                                                                      ecosystem . Exam ples o� so�t �orks include

                                                                                                                                                                                 con�usion am ong users. The blockchains

                              w hat they w ant, they can m ake a new token                                                                                                                                                                                                                                                          an increased block size lim it, signature
                                                                                                                                                                                 that use hard�orks end up w ith tw o di��erent

                              and convince others to join. H ow ever, w ith                                                                                                                                                                                                                                                         hashing algorithm change, or a protocol layer
                                                                                                                                                                                 versions o� their coin: one �or users w ho

                              this approach, there’s also a risk o  con using                                                                                                    upgraded the so�tw are and one �or those w ho                                                                                                      m odi�ication that im proves netw ork e��iciency

                              users: they m ight only som etim es realize that                                                                                                   didn’t. H ow ever, this does not m ean that all                                                                                                    w hile preserving all historical transactions and

                              there are tw o di��erent tokens.                                                                                                                   hard  orks are bad: som etim es, it’s necessary                                                                                                    balances.

                                                                                                                                                                                                                                                                                                                                                                                                                                 PAYOUTMAGAZINE                       7
   2   3   4   5   6   7   8   9   10   11   12