Tuesday, December 11

What’s a blockchain fork, and why is it important in the growth of crypto?

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Forks are a core part of the blockchain experience. They are akin to a systems upgrade. To “fork” the chain is to change the software that makes the blockchain operate. Depending on the situation, forks range from utterly mundane to extremely controversial.

A fork can be used by the core developer team of a blockchain to push long-planned upgrades to the network. Or they can be proposed and attempted by renegade groups outside of the normal “line of command”, showcasing the decentralised nature of these networks. Understanding the nature of forks is crucial if you want to have an informed opinion about blockchain issues.

The importance of forks

Soft forks rarely incite much controversy because they are backward compatible with the pre-fork implementation of the blockchain. There is no creation of a new branch in the chain.

A hard fork is what happens when an upgrade is incompatible with old versions of the blockchain software. This means that anybody who does not upgrade will be left behind on an old and potentially worthless legacy chain. If the vast majority of developers and mining nodes are in favor of a new upgrade to a blockchain, the process will occur without drama.

When multiple factions of a blockchain community are at war with each other and a hard fork is attempted, unusual things can happen.

Examples of forks

Both of the two most popular blockchains in the world have experienced hard forks as a result of debate within their communities.

When $55 milion of Ethereum tokens (ETH) were stolen in the hacking of a high-profile fund, part of the Ethereum community wanted to use a hard fork to revert the stolen funds to their original owners.

Others opposed this action. They said that such a hard fork would invalidate the integrity of the ETH token as a currency and make it possible for more nefarious forks in the future. When the hard fork took place in spite of these arguments, many dissenting people refused to upgrade their software. The resultant hard fork left a large number of people on the legacy blockchain, now known as Ethereum Classic.

The good news is that Ethereum and Ethereum Classic co-exist in relative peacefulness as of 2018. It is easy to argue that their mutual existence is a good thing because it allows for the two governance options to be tested against each other over time, with little downside.

Also read: dApp accelerators are apparently an “in” thing now, with blockchain apps going mainstream

Domenic Thomas, the CEO of WORBLI says:

Some blockchain projects use the same underlying blockchain software and protocols, but do not have a shared history and were not a product of any controversy or implied need to meet a different set of demands. Instead, these ‘Sister Chains’ benefit from the open source nature of blockchain and can instead provide additional innovation to the borrowed blockchain protocol which is used to start the new Sister Chain network. WORBLI is a great example of this through its use of the EOSIO software to build an enterprise-ready financial services blockchain network.

Fork rivalry

Bitcoin’s hard fork did not end so well. In fact, it makes for a critical case study in blockchain governance.

Borne out of a near-religious debate over block size limits, the Bitcoin blockchain experienced a major hard fork on August 1, 2017. A large minority of developers and miners upgraded to a new and incompatible version of the Bitcoin software for their nodes. This immediately split the Bitcoin into two branches: The main branch, and a new and viable secondary branch now known as Bitcoin Cash.

Unlike the Ethereum/Ethereum Classic split, the BTC (Bitcoin) and BCH (Bitcoin Cash) split was acrimonious. To the chagrin of many, influential members of the Bitcoin Cash movement have claimed BCH to be “the real Bitcoin.” As of publication time, Bitcoin Cash has around 8% the market cap of the original Bitcoin blockchain.

The hard fork rivalry that began in mid-2017 continues to this day, with two separate communities existing in largely separate echo chambers (complete with active subreddits) about what is and isn’t the real bitcoin.

The future of forks

Forks, whether of the hard or soft variety, are an inextricable part of the blockchain experience. Sometimes they will occur without any debate whatsoever, as a simple necessity of the development process. Other times they will be the result of disagreement within a community.

Also read: (Infographic) A beginner’s guide to Bitcoin and blockchain technology

The future of forks must trend towards peaceful debate as seen in Ethereum’s example, not a contentious argument as seen with Bitcoin. As blockchain networks become ever more valuable, good fork etiquette becomes ever more important.

How to have healthy forks?

To create the best possible outcome for future forks, people need to debate in good faith. Disagreements should be handled at the organizational level as often as possible.

The creation of two separate blockchains due to a lack of compromise should be seen as the last resort. However, when this situation becomes inevitable as two parties cannot come to an agreement, the fork should be executed with as much mutual respect and coordination as is possible. This way the exchanges, wallets, and miners can keep users safe throughout the process and people will be able to vote with their network activity over time. If forks are executed in this way, blockchain development will proceed with the minimum of drama and the maximum of productivity.

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Photo by Deva Darshan on Unsplash

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