Fork (blockchain): Difference between revisions

Content deleted Content added

Inline

Revision as of 10:02, 25 February 2018

In cryptocurrencies, varied parties need to use common rules to maintain the history of the blockchain.^[1] A fork refers to a situation when a rule change occurs.^[1] Forks have been used in cryptocurrencies in order to add new features to a blockchain or to reverse the effects of hacking or catostrophic bugs on a blockchain as was the case with the bitcoin fork on 6 August 2010^[2] or the fork between Ethereum and Ethereum Classic. Notably, blockchain forks have been widely discussed in the context of the bitcoin scalability problem.

Blockchain splits

Forks are related to blockchain splits. As a result of a rule fork, a blockchain can split (diverge) into two separate paths forward.^[1]

Types of forks

Forks can be classified as soft forks or hard forks.

Hard fork

A hard fork is a rule change that is not compatible with the old set of rules. It can be described as a change that expands the previous rules. The software that enforces the old rules will see the blocks adhering to the new rules as invalid.^[1] To prevent a split, either all nodes running the old software shall upgrade to new rules,^[1] or all nodes using the new software shall return to the old rules.

For example, Ethereum has hard-forked to "make whole" the investors in The DAO, which had been hacked by exploiting a vulnerability in its code.^[3] In this case, the fork resulted in a split creating Ethereum and Ethereum Classic chains. In 2014 the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange. The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment.^[4]

Soft fork

In contrast to a hard fork, a soft fork is a change of rules that creates blocks recognized as valid by the old software, i.e. it is backwards-compatible.^[1] A soft fork can also split the network when non-upgraded software creates blocks not considered valid by the new rules.^[1] A user-activated soft fork (UASF) is a controversial idea that explores how to perform a blockchain upgrade that is not supported by those who provide the network's hashing power.^[1]

Technical issues

Intentional blockchain forks must be carried out carefully to avoid vulnerabilities to replay attacks. In addition because the addresses used between forks are often identical, this can result in problems when coins are sent to the wrong fork.

References

^ ^a ^b ^c ^d ^e ^f ^g ^h Amy Castor (27 March 2017). "A Short Guide to Bitcoin Forks". CoinDesk. Retrieved 1 July 2017.
^ Sawyer, Matt (26 February 2013). "The Beginners Guide To Bitcoin – Everything You Need To Know". Monetarism. Archived from the original on 2014-04-09. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
^ Coppola, Frances (21 July 2016). "A Painful Lesson For The Ethereum Community". Forbes.
^ Gillespie, Clay Michael (15 August 2014). "Official NXT Decision: No Blockchain Rollback". Cryptocoin News. Retrieved 13 November 2016.

[coindesk20170327forks-1] ^ ^a ^b ^c ^d ^e ^f ^g ^h Amy Castor (27 March 2017). "A Short Guide to Bitcoin Forks". CoinDesk. Retrieved 1 July 2017.

[Monetarism1-2] Sawyer, Matt (26 February 2013). "The Beginners Guide To Bitcoin – Everything You Need To Know". Monetarism. Archived from the original on 2014-04-09. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)

[3] Coppola, Frances (21 July 2016). "A Painful Lesson For The Ethereum Community". Forbes.

[onxtd-4] Gillespie, Clay Michael (15 August 2014). "Official NXT Decision: No Blockchain Rollback". Cryptocoin News. Retrieved 13 November 2016.

[1]

[2]

[3]

[4]

Revision as of 09:48, 25 February 2018 edit Ladislav Mecir (talk \| contribs) Extended confirmed users 11,014 edits →‎Hard fork: add informations ← Previous edit		Revision as of 10:02, 25 February 2018 edit undo Ladislav Mecir (talk \| contribs) Extended confirmed users 11,014 edits add an example of an early bitcoin fork Next edit →
Line 1:		Line 1:
	In cryptocurrencies, varied parties need to use common rules to maintain the history of the [[blockchain]].<ref name="coindesk20170327forks" /> A '''fork''' refers to a situation when a rule change occurs.<ref name="coindesk20170327forks" /> Forks have been used in cryptocurrencies in order to add new features to a blockchain or to reverse the effects of hacking or catostrophic bugs on a blockchain as was the case with the fork between [[Ethereum]] and [[Ethereum Classic]]. Notably, blockchain forks have been widely discussed in the context of the [[bitcoin scalability problem]].		In cryptocurrencies, varied parties need to use common rules to maintain the history of the [[blockchain]].<ref name="coindesk20170327forks" /> A '''fork''' refers to a situation when a rule change occurs.<ref name="coindesk20170327forks" /> Forks have been used in cryptocurrencies in order to add new features to a blockchain or to reverse the effects of hacking or catostrophic bugs on a blockchain as was the case with the bitcoin fork on 6 August 2010<ref name="Monetarism1">{{cite web\|last=Sawyer\|first=Matt\|title=The Beginners Guide To Bitcoin – Everything You Need To Know\|url=http://www.monetarism.co.uk/the-beginners-guide-to-bitcoin-everything-you-need-to-know/\|publisher=Monetarism\|date=26 February 2013 \| archiveurl = http://web.archive.org/web/20140409025103/http://www.monetarism.co.uk/the-beginners-guide-to-bitcoin-everything-you-need-to-know/ \| archivedate = 2014-04-09\| deadurl=no}}</ref> or the fork between [[Ethereum]] and [[Ethereum Classic]]. Notably, blockchain forks have been widely discussed in the context of the [[bitcoin scalability problem]].

	== Blockchain splits ==		== Blockchain splits ==