What is Fork in Blockchain?
Talking about cryptocurrencies is common now, both among experienced investors and newcomers, as interest and participation have grown substantially in recent years.
Interest extends beyond investments: cryptocurrencies rely on underlying technologies and terminology that are increasingly important to understand.
Newcomers often ask what a fork is, because the term appears frequently in forums and articles and requires some background to understand.
What is a Fork?
In general terms, a fork is a change to the source code of a cryptocurrency or a cryptocurrency platform intended to modify the software and create a variation in the system. As these platforms are often built on open-source software, anyone with the necessary resources and skills can implement a fork.
A fork alters the original code and produces a different version that, according to its creators, provides improvements or different functionality. This process has led to many alternative cryptocurrencies and platform variants.
Modifying cryptocurrency software should not be done lightly because forks have significant implications. To discuss forks properly, it is important to distinguish the two main types: hard forks and soft forks.
The Hard Forks
A hard fork is a change that is not backward compatible. If a subset of nodes implements the change and the wider network does not adopt it, the result is two separate and incompatible chains. A hard fork can therefore create a new cryptocurrency that shares history with the original but diverges afterward.
Examples include the splits that produced Bitcoin Cash (BCH) from Bitcoin (BTC) and Ethereum Classic (ETC) from Ethereum (ETH). These are hard forks because the new chains are incompatible with the originals.
The Soft Forks
A soft fork is a backward-compatible change. It requires broad support from network participants so that updated nodes continue to accept blocks created by non-updated nodes. If sufficient consensus is reached and nodes upgrade, the network can adopt the change without splitting into a separate chain.
Soft forks aim to improve or tighten rules without creating a new, incompatible blockchain.
The controversy of the Forks
One controversy around forks concerns their purpose. Because open-source code is widely available, anyone with technical knowledge can create a fork, but a fork needs support from users, miners, or exchanges to be meaningful. When a hard fork creates a new currency, holders of the original coin often receive an equivalent amount on the new chain, which some critics call “free money.”
Whether a fork is useful depends on the community, the technical changes, and the support it gains. If you expect to receive coins from a fork, check which exchanges and wallets support the forked chain and which platforms accept trades for the new asset.
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