What is a Fork in Cryptocurrency?
If you’re worried about a fork in cryptocurrency, be sure to read up on what it means with our guide below.
What is a Fork in CryptoCurrency?
If there’s a fork in cryptocurrency, it refers to the fact that there is a divergence in the blockchain. The blockchain will end up splitting into two, creating separate branches. This fork can either be a temporary occurrence, or it can be a permanent one.
The Types of Forks:
A soft fork occurs when the software a blockchain uses is updated, and thus a new branch is created using this updated software.
However, the original branch will continue to use the old system of software and make it backward compatible.
A soft fork does not require all users (such as miners) to upgrade their nodes, only a certain few will have to, and both chains can be used regardless.
In comparison, a hard fork is a bit more serious. This is a fork that is not backward compatible and is a permanent division from the old software.
If a node that is updated comes into contact with transactions that use the old software, this transaction will be seen as invalid. Every miner will need to upgrade their software to have access to new transactions that are considered valid.
However, with a hard fork, votes can be held. If enough users want to continue using the old software, the chain will split.
Want to know more about forks in the crypto world? Open up an online bank account, deposit your crypto, and start using your BlockCard as soon as your application is complete.