May 22, 2018By Nathan Bentley
“To overly simplify, cryptocurrency uses computer generated code to create a form of digital money. Bitcoin was the first to gain popularity; however, hundreds of such coins such as Litecoin and Dogecoin now exist.”
“An accidental fork occurs if coin updates are not truly compatible. People using different versions of the software create two different ledgers–one from the older version, and one from the newer version. In this circumstance the coin developer must rapidly eliminate the bugs causing the incompatibilities.”
“A hard fork is generated when the cryptocurrency’s developers decide that changes must be made to the programming of the coin that will create incompatibilities between the older and newer version. When the changes are made, all users of that coin must be willing to update all applications to continue to use that coin type correctly.”As you can guess, it’s quite a difficult concept to grasp, the bottom line though, a fork is a change in direction which often results in the creation of a new asset. Now, according to research carried out by Bitmex Research, Bitcoin has experienced 44 of these alone, just since August 2017. See the full Bitmex Research report, here- https://blog.bitmex.com/44-bitcoin-fork-coins/ As we know, the very first Bitcoin fork saw the inception of Bitcoin Cash, since then though, we now have a number of Bitcoin based assets, from currencies such as Bitcoin Diamond and Bitcoin Gold, to other, less serious currencies such as Bitcoin God, Bitcoin Candy and Bitcoin Pizza. Why are there so many forks going on within Bitcoin? This is something we can’t be sure of. Overall, many of the forks won’t damage the network nor will they damage Bitcoin; however, it does feel a bit like everybody is trying to do their own thing and in turn, are missing the bigger picture. If people put as much effort into ensuring the future of Bitcoin as they did creating their own forks, surely, the community would be more unified in ensuring Bitcoin does have a future? To refer back to Tech-recipies.com:
“Ultimately, a fork is a stressful event to a cryptocurrency community which frequently increases risks associated with that particular coin type. As coin investors weigh these risks, some will choose to sale. Often during a fork event the coin’s value will fall. If the fork puts in the coin’s long-term survival at risk, this drop is value is warranted. Conversely, if the fork ultimately improves the coin’s stability and structure through code improvements, a fork can be an excellent buying opportunity.”See the full Tech-recipies.com discussion of cryptocurrency forks for yourself, here- http://www.tech-recipes.com/rx/48517/cryptocurrency-what-is-a-fork/ Overall, the research by Bitmex Research highlights just how much of a trend this is becoming. More forks could pose more risk to the markets but hopefully, people will start to realise this. Instead of splitting apart, wouldn’t it be nice if the crypto-community started working together?