Bitcoin hard fork and soft fork: changes for the benefit of future
18 October 2017
18 October 2017
The code of bitcoin like other currencies is decentralized and open. It means that this code can be easily ungraded. With the cryptocurrency industry being developed and the bitcoin blockchain becoming greater and greater, users are setting up new demands to the network. Therefore, improvements are necessary over time.
It is cryptocurrency enthusiasts from various companies engaged in decentralized technologies that create upgrades for the bitcoin blockchain. Offers are discussed by the blockchain community and then miners decide whether to accept or reject updates. Changes that affect the blockchain structure of bitcoin and reverse complexity principles or a set of available operations are hard fork. Frequently, bitcoin hard fork results in its division into several blockchains. It is caused by the fact that not all miners accept upgrades and, subsequently, some of network blocks become different from others. They are rejected and create a new blockchain. Soft fork is a lesser change when the rules are reversed but not the block structure. Soft fork does not lead to the network split-up.
What processes bitcoin will face, whether hard fork or soft fork will take place or whether it will function without changes, depends on miners’ agreement.
In 2017, the example of hard fork was the division of bitcoin into the main blockchain and Bitcoin Cash. The necessity was caused by the network scalability: some miners came out for the increase of a block capacity so that it could contain more information and network transaction would be processed faster; others offered to change the structure of the block, making it larger.
As the result, the majority of votes in the bitcoin network accepted the Segregated Witness upgrade, changing the order of transaction record. Now, transaction signatures are stored in the separate data structure.
Bitcoin hard fork led to bitcoin splitting into two parts. Thus, a new coin called Cash appeared. Unexpectedly, cryptocurrency enthusiasts have highly appreciated it, and this coin is currently ranked second in terms of the value on exchanges: just after bitcoin, its predecessor.
Bitcoin Cash has separated itself from the major bitcoin blockchain because of hard fork on August 1
Today, one definitely knows that new bitcoin fork will take place in fall 2017. It is related to the Segwit2x upgrade that will increase the block twofold (up to 2 MB). It is still unclear whether the update will follow the division or not.
China is preparing a new network spit-up: the Bitcoin Gold project led by the LightningASIC mining company is going to separate its chain section from the bitcoin blockchain. This bitcoin fork is aimed at creating fully decentralized bitcoin and decreasing the impact of major miners on network events.
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