What Is a Crypto Fork?


What Is a Crypto Fork?

by Jake Wengroff

Cryptocurrencies are powered by the blockchain. As open-source software, the blockchain, and by extension, cryptocurrencies, rely on communities of developers to maintain and expand the underlying code. A crypto fork occurs whenever a community member or group wishes to make a change to the blockchain’s protocol, or basic set of rules. However, to do this, the original protocol is not completely rewritten. Instead, the chain is replicated and split from the original, creating a secondary chain that shares all of its history with the original. However, this new fork is “headed off in a new direction,” explains Coinbase.

The term “fork” is common to any software developer, as a fork is simply a copy of a codebase or repository intended to be refactored or reworked. Forks allow developers to experiment freely with code without affecting the original, underlying source code. This is especially helpful with open-source projects, which attract a community of developers eager to add features or remove bugs from public code repositories.

The Need for Crypto Forks

Most digital currencies have independent development teams responsible for changes and improvements to the network. As such, a crypto fork occurs so that a team or community member can experiment with adding more features or upgrading the currency’s security. 

Further, the developers of a new cryptocurrency can use a fork to create entirely new coins and ecosystems. By forking the chain, a developer can work on new features as a project, that when tested and validated by others in the community, can be incorporated back into the original chain.

Soft Fork vs. Hard Fork

There are two different types of forks: hard forks and soft forks. Both hard forks and soft forks are identical in the sense that when a cryptocurrency platform’s existing code is requested to be changed, the existing version remains on the network while the new version is created.

With a soft fork, however, only one blockchain will remain valid as users adopt the update. With a hard fork, both the old and new blockchains exist side by side, which means that the software must be updated to work by the new rules. Simply put, both forks create a split, but a hard fork creates two blockchains and a soft fork is meant to result in only one. Many people view a soft fork as nothing more than a software upgrade. 

Considering the differences in security between hard and soft forks, almost all users and developers call for a hard fork, even when a soft fork seems like it could do the job. Overhauling the blocks in a blockchain requires a tremendous amount of computing power, but the privacy gained from a hard fork makes more sense than using a soft fork. In cases of hard forks, two different coins and blockchains will run simultaneously after the fork. A hard fork generally ends in one of two ways:

  1. One blockchain becomes dominant, resulting in the other blockchain having low community adoption and value; or
  2. Both blockchains are adopted, co-existing and operating independently of each other with roughly equal community adoption and value. 

The first outcome is the most common, as happened with Ethereum and Ethereum Classic, with Ethereum vastly outperforming Ethereum Classic. The second is rarer, but it does happen, explains Commodity.com. Bitcoin Cash and Bitcoin ended up broadly coexisting once the SegWit2x update failed to materialize.

Keeping Your Crypto Safe 

Though the blockchain cannot be hacked, and crypto forks often mean that the blockchain is getting upgraded with new features, including those related to security, risks abound. Wallets, platforms and exchanges that store and transact crypto can be subject to attack. Once malicious actors obtain a crypto’s private key, it may be hard for the true owner to have recourse or even prove their ownership.

The industry needs market-driven solutions that can keep up with the ever-complex marketplace of crypto assets. TransitNet is creating the industry’s first third-party title registry that demonstrates proof of ownership of crypto assets, to add a layer of protection for investors in digital currencies and other crypto assets.

Join the forefront of the new crypto infrastructure. Request an exclusive registration for TransitNet’s offchain title registry when it launches today.

Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, he covers such topics as security, mobility, e-commerce and the Internet of Things.


Coinbase – What is a fork?

Investopedia – Hard Fork (Blockchain)

Commodity.com – What Are Forks and How Do They Impact the Price of Cryptocurrency?

CoinTelegraph – Soft Fork vs. Hard Fork: Differences Explained

GitHub – Fork a repo

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