Hard Fork vs Soft Fork

In light of recent events, it is high time we discussed the issue of forking including both its benefits and potentially catastrophic outcomes including multiple versions of a coin coexisting in parallel and the various network attacks associated with that. In the simplest terms, hard and soft forking describe two separate ways of updating the blockchain software. When the latest version looks to break compatibility with the previous versions. This, however, is not to be confused with a software fall, where someone takes the original project code and modifies it in order to create a new project of their own such as Litecoin being a project spinoff of Bitcoin. In order to better understand forking, we first need to know what a node is to find if anyone who possesses a copy of the blockchain as they will be playing a very important and integral role in the processes.

A soft fork is a backward compatible method of upgrading the core wallet software and defined as a temporary split in the blockchain that occurs when these new rules are implemented. The original chain contains blocks from non upgraded nodes. However, it will all flex up to blocks generated by the upgraded nodes. Meanwhile the forks chain contains blocks only from upgraded nodes, which are chosen to actively support new rules and be soft fork. As soon as the soft fork is implemented, it is then up’d to the upgraded nodes to try and reach a clear majority and remind us to reach a certain percentage of a network cash rate usually by a certain block number. Otherwise the soft fork will fail and the original chain will simply carry on unchanged.

However, if a consensus is reached, the new rules are implemented across the network and any non upgraded nodes still mining, will simply be wasting their time rehashing old invalid information both generating and gaining nothing. This in turn leaves the upgraded node blocks being recognized as the strongest and truest chain of events.

In comparison, a hard fork enables a quick and high priority change to the rule, which is not backwards compatible and defined as a permanent divergence in the block chain that occurs when new rules are implemented. Both the new and old chains run in parallel to each other, but each follows a different set of rules. Because of this, it means users who have chosen to utilize different chains, will not be able to send funds to each other as they will each be using a different version of the same coin that are incompatible with one another. This then also brings up the issue of dual funds. Where as soon as the fork happens every coin in existence gets duplicated. So, if you happen to have 100 coins before the fork, you’ll now have 100 on the original chain and 100 on the forked chain giving you a total of 200 spend. Of course then won’t be work the same as each of them and they re not transferrable across chains.

So, I hope that in the long run, one chin gins a clear majority of users and support. If not, the economy and politics around it can become a real mess, so I hope is that the hard fork will ever be instigated if absolutely necessary and it has a clear overwhelming support from its users.

Most of these new figures will be implemented via a soft fork due to its safe and less urgent nature. These include things such as check sequence, verify or CSV, which allows the coins to be locked and unspendable until a certain given time period or segregated witness, which seeks to fix [inaudible 00:03:33] of transactions on the network. However, new rules actually bring compatibility must be implemented with a hard fork. These would include things such as methods to prevent serious network abuse an increase of the block size on the block chain or seeking to read distribute funds due to broken code or theft through a centralized method.

Further more, this then starts to lead on to the question of when a hard fork should actually be taken. The moral and ethical delima is behind that decision. Who should take it and under what circumstances. Unfortunately however, we are not philosophers and that is another topic for another time. So, be sure to subscribe so you don’t miss it or any of our other content and I will see you next time.


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