The term fork comes from the English language and has nothing to do with its French translation “fourche”. In the world of cryptocurrency, the term fork is used to designate a blockchain that splits into two different entities of a given block in the event of a “hard fork” or undergoes a major update across its entire chain. The network is in the case of a “soft fork”.
In this article, we will focus on a “hard fork” that we will simply call a “fork,” as the “soft fork” can be thought of as a simple update of the blockchain.
Why do forks occur?
First of all, it should be noted that some block chains cannot be forked due to their design. Therefore, there is no reason that could cause such an event to occur.
With regards to the blockchain having the potential to undergo a fork, there are two main different reasons that could push the chain to split in two:
The worker tokens do not agree on the evolution that the project should take. When it is not possible to reach a compromise, the project then splits into two different series which then develop independently;
The reason may be that the blockchain has been attacked in the past and some people want to go back in order to correct this problem, while other users completely reject it because the blockchain should never be modified. In this case, the blockchain can be divided into two parts, one going back in time, the other not.
In most cases, a fork occurs when excessive differences appear between project members, the second case being much rarer.
Not all forks are alike. For example, some may occur when one reaches a certain block, while others occur on a specific date or when a special event occurs.
In some cases, users must place their tokens on a private wallet to receive forked tokens, while in other cases tokens from the fork are automatically added to the address where the original blockchain tokens are kept.
Generally, all users receive tokens that symbolize the new blockchain in proportion to the tokens they originally owned. This allows people who do not believe in the new blockchain to resell their tokens and those who support them to hold them or buy new ones.
What are the most famous forks?
Several forks have already been performed. However, we will mention only the three that we consider the most emblematic:
Probably the most famous fork is the one between Bitcoin and Bitcoin Cash which occurred in 1Verse August 2017. The origin of this fork stems from disagreement among community members about what size blocks should be.
The second most token split occurred on the Ethereum network after the DAO hack. Then some community members wanted to come back in order to correct this, while others didn’t want to change the blockchain. On July 20, 2016, the project subsequently split in two, with Ethereum Classic (ETC) deciding to stay with the original blockchain and Ethereum (ETH) deciding to return before the DAO hack.
Finally, the third fork that made the biggest impression was Bitcoin Cash, which split between Bitcoin Cash ABC and Bitcoin Cash Satoshi Vision on November 15, 2018. The proponents of both of these blockchains then launched a war that sent cryptocurrency prices skyrocketing, causing the blockchain community to fall. It interacts well. Ultimately, Bitcoin Cash ABC will get the Bitcoin Cash (BCH) category, while Bitcoin Cash Satoshi Vision will become Bitcoin SV (BSV).
Conclusion at the crossroads
Forex occurs when excessive differences prevent members of the community associated with a cryptocurrency from reaching a compromise on the development of the latter or when a dangerous event occurs.
Some cryptocurrencies are succeeding and have managed to become more popular than the original cryptocurrency, but in most cases it is the digital asset that was there first that keeps most of the community on its side because investors generally have more connections to the underlying project.
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I discovered the world of cryptocurrency in January 2018. I arrived at the worst time to invest, I have not stopped training since then, and now I am sharing my knowledge in order to facilitate the adoption of cryptocurrencies.