Page 7 - volume-13-1

fork is a divergence from the previous
A version of software or blockchain. Soft
forks are backward-compatible, meaning they
don’t break older software versions. As long
as you downloaded and installed the latest
version, all your transactions will be valid on
both new and old blockchains. CRYPTOCURRENCY FORKS:
What are
What are Soft Forks

Soft forks allow decentralized networks
like Bitcoin, Ethereum, and other blockchain
platforms to make changes that are not
so dramatic or drastic as a hard fork. Soft
forks do not require any consensus from Soft Forks
the network, meaning that the network can
only accept them if a majority of users signal
they’re comfortable with the change. Soft
forks are backward-compatible with old
software, so theoretically, they can’t break the
network. They can only make minor changes
that are moderate.

The most famous soft fork was the
introduction of SegWit on the Bitcoin network.
This soft fork did not break the network or
cause any issues. It just added an extra layer
of security to transactions created before it
was available. That’s why you can still send
mined transactions, but you will need to use
SegWit for all new transactions. Despite this,
it caused a lot of drama regarding how bitcoin
users would react to this process or ensure it
would be quickly adopted and integrated into
their software. It was when blocks that did not
receive a majority of miners signaled support
for SegWit would be rejected by the network.
At this time, it is estimated that at least 80%
of miners in the network have upgraded
their software to support SegWit. Suppose
that amount has yet to be adopted. In that
case, all transactions made after August 1st
are considered invalid and must be re-sent
with complete transaction data, i.e., you will
need to spend more gas on sending an entire
transaction.

How Do Soft Forks Work
When most of the network has agreed
upon a soft fork, it becomes part of the new
rules for that blockchain. The old rules are
still valid but no longer enforced or used. It

PAYOUTMAGAZINE 7