For several days, thecrypto news is dominated by the fall of the Terra ecosystem. A fall that brings its share of questions but also technical terms. If some consider that the renewal of the ecosystem goes through a massive burn of the LUNA token, others had only one word in their mouth: the fork. But by the way, what is a fork? Let’s see it together in this article!
No need to take an English – French dictionary to understand what a fork is. The term, which would be translated in the language of Molière by “fork” can nevertheless help to understand in a pictorial way what a fork is: the creation of a branch on a blockchain. A branch that gives rise to a parallel network to the one that already existed.
In the world of forks, we distinguish the hard fork and the soft fork. A hard fork represents the separation of a blockchain into two different entities, starting from a certain block. The soft fork can in turn be defined as an important update on a given network. A hard fork introduces an irreversible operation on the blockchain, unlike a soft fork. By abuse of language, the term fork is most often used to designate hard forks. In the following parts, we will focus on the hard fork.
When do we use a fork?
The fork is above all a breaking tool. It is often used when too deep disagreements arise between members of the community. In such a case, the project generally separates into two distinct chains which will evolve completely independently of each other.
A second scenario can explain the use of a fork: following an attack. In this case, the fork is used to restore the network conditions before this attack. This second method is also frequently criticized by some users who consider that the blockchain should never be modified.
In the case of Terra, the question of the fork was raised around this second scenario. If the fork is validated, the blockchain will split in two. One of them will revert to network conditions at a time T (decided by the users), the other will not.
By their structuring and their designs, some blockchains are built to not be able to undergo a fork.
Examples of fork !
If you are looking for the most famous fork, you will probably have to turn to the mother of cryptocurrencies. In August 2017, blockchain Bitcoin validates a fork between Bitcoin and Bitcoin Cash. This fork is a result of a disagreement among community members about block sizes. A few months after this fork, Bitcoin Cash will experience a new fork that will result in the Bitcoin Cash (BCH) and Bitcoin SV (BSV) projects.
The Ethereum blockchain also experienced a fork that has remained one of the most significant. Following The DAO hack, the community split between those who wanted a rollback and those who did not want the blockchain changed. This mismatch led to a fork on July 20, 2016 and the creation of Ethereum Classic (ETC) in addition to the Ethereum (ETH) network.
In both of these examples, as in the majority of cases, it is the original asset that retains the most value. Indeed, Bitcoin is now much more popular than Bitcoin Cash. Same observation with Ethereum which largely overhangs Ethereum Classic.
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