Fork: which chain is the original one?
What is a fork
The concept of "fork" is familiar to almost all crypto-enthusiasts, but not everyone knows that there are many varieties of forks, different in nature and structure.
What is a network fork?
A fork is a division of the blockchain by miners in which the users who commit the fork maintain consensus rules to which all blocks must obey. Below we will look at four types of forks, differing in their purpose and method of implementation.
Types of forks:
1) Incompatible hardfork;
2) Semi-compatible hardfork;
3) Compatible hardfork;
- INCOMPATIBLE HARDFORK
An incompatible hardfork is the simplest example of a circuit split: at a certain point in the blockchain's existence, some users decide that the old set of rules no longer suits them for some reason, so they make a branch from the main network. After this happens, the two circuits are independent of each other and continue to exist separately. To take the Ethereum Classic hardfork as an example, a network separate from the main Ethereum network with its own set of rules that under no circumstances can rejoin its ancestor. In this case, a number of miners move to the new chain, while the other part continues to mine blocks of the old one.
- SEMI-COMPLIANT HARD FORK.
A more complex type of fork. It occurs when the rules of the two networks overlap, but there are individual blocks that are unable to obey the rules of both chains. Miners can control the process and mine only those blocks that obey both sets of rules, but if someone starts mining other blocks, the network will split. In this scenario, miners can also link back together if, after splitting, they start mining compatible blocks and surpass the power of the second chain. In such a scenario, it is more profitable for miners to stay on the original network, which is why this type of fork is not popular.
- COMPATIBLE HARDFORK
In this scenario, the set of blockchain rules can remain unchanged, while allowing support for new rules. The consensus expands the moment the first new block, different in principle from the old rules, is mined. The chain exists as long as the miners mining it have more power than the original network's miners. As soon as the power drops below that level, the new chain is abandoned. When doing such a fork, miners need to make sure that their power is consistently higher than the original chain's power, otherwise it can result in a loss of money and time. An example of such a fork would be Bitcoin Classic.
As the name implies, soft fork is the "softest" representative of this list. To explain its principle in simple terms, a number of miners do not create new consensus rules, but supplement the old ones. Obedience to the new rules is not a prerequisite for continued participation in the network: nodes that continue to exist within the old consensus do not lose their functionality at all and can interact with nodes that have adopted the new rules. Such a fork is conducted to improve the coin.
The risk of forks
Forks are dangerous for both miners and users of the cryptocurrency. For example, you invested 10 thousand rubles in bitcoin, left it in your wallet and forgot about it for a year. During this time, the chain with your transaction was abandoned and the invested funds simply disappeared. It's also worth noting that when the chain splits, the community also splits, which can't determine which branch is considered the true coin (think Bitcoin and Bitcoin Cash, Ethereum and Ethereum Classic).