HARD FORKS

                                                     Hard Forks: are they really worth it?

 Introduction

 “Virtual currencies, most notably Bitcoin, have attracted  the imagination of some, generated fear among others, and confused the heck out of the rest of us.”

                                                                                                           – Thomas Carper, US-Senator

 There are many accidental inventions which have changed the world. Cryptocurrency is also one of them. Satoshi Nakamoto who invented cryptocurrency actually never intended to build it. He just wanted to build a peer to peer digital electronic system. And with the time this phenomenon went on becoming thrilling and exciting. And now it has become the part of earning a huge income for common people. The article throws light on hard forks, how and why it was generated and what will be the future of hard forks

 What is a hard fork?

  When a single cryptocurrency splits in two, it is called hard fork. When the code of cryptocurrencies is changed, it results in a previous and a new version. A soft fork is also the same thing, but in case of a soft fork, only one block chain (one coin) will remain valid as the user receives the update. So both fork’s causes a split, but a hard fork creates two blockchain/coins, and a soft fork will result in one. Bitcoin Cash, Bitcoin Gold, and Segwit2x are examples of some hard forks.

 How are Hard Forks Created?

Generally, for updating a coin’s software some form of consensus is required. Same is applicable for implementing a soft fork or hard fork. If a fork is to be created to update the existing software which is being used currently, it requires majority support or consensus from coin holders(nodes), who are connected to the coin network. This consensus in-practice comes first and from miners and rather than a general population of users because they tend to control a range of nodes. So forks just require consensus for an update being adopted. In terms of creating a hard fork or soft fork (not adopting it), anyone can use a coin’s code and change it and can create a hard fork or soft fork to be adopted.

Particularly any developer who is having required skills can take the decision to fork Bitcoin or create another copy of Bitcoin. That is quite “easy,”.But the hard part is gaining support from miners, users, and exchanges. Without support from miners and users, there is no functioning blockchain. Without taking the support of exchanges, there is likely little value. Hence a single cryptocurrency with a one block chain (like Bitcoin) gets a proper “hard fork”.

 Accepted by a lot of miners, users, and exchanges for there to get a viable, functioning, alternative. A fork-like this can be created for many reasons, it can be done either to innovate (as is the case with Bitcoin Cash), or to repair the damage done by a hack (as is the case with Ether), or because consensus could not be achieved for a soft fork (as was a bit the case with Bitcoin Cash and was almost the case with SegWit2x).

Different Hard Forks

 Hard forks can either be planned or controversial.

1.      Planned Hard Forks

A planned hard fork is a contractual upgrade that has already been on the project’s roadmap since the beginning. Since it is an upgrade to improve the blockchain’s efficacy and features, the whole community – headed by the core developers – will create the new chain as the upgrade requires a change in the present code base.

 Examples

Ethereum’s Byzantium:

 Monero:

2. Controversial Hard Forks

 A controversial hard fork is because of disagreements within the community which results in a section of them, creating a new chain by introducing changes to the code, like the creation of Bitcoin Cash.

Examples

Bitcoin Cash:

Ethereum Classic:

3. Spin-off Coins

AS Bitcoin’s is open source, anybody can view, and make changes to it in to create a new coin with new features. For example, Litecoin was a fork of Bitcoin, created from changing the codebase of Bitcoin. The features of Litecoin include changes such as:

 • Average of 2.5 minutes block time as compared to Bitcoin’s 10 minutes

 • Different consensus algorithm: Script instead of Bitcoin’s SHA 256

• Fixed coin supply of 84 million instead of Bitcoin’s 21 million

Examples

1. Namecoin

 2. Peercoin

3. Litecoin

4. Dogecoin

5. Auroracoin

 Failure of Hard forks

 There are many hard forks available and countless pop up every day. Some of them experience success while many others end up end up being outright failures. Many of them start with promising futures, initiating a lot of hope and raising large amounts of starting capital. Then, they fail. The list of few biggest failures is as follows

1.      Bitcoin Unlimited

Bitcoin Unlimited was created after the release of Bitcoin XT and Bitcoin Classic". XT and Classic were two previous hard forks and they also failed. The reason of failure was A Remote Exploit Crash bug discovered in Bitcoin Unlimited. The Remote Exploit Crash bug was the second major bug exposed in Unlimited and more than 350 BitCoin Unlimited nodes also crashed because of it.T he first bug occurred when a mining pool running Unlimited mined an invalid block, resulting in the loss of 13.2 BTC. Miners are unlikely to run buggy software like Bitcoin Unlimited that is not tested or peer-reviewed before release.

2.      Bitcoin Classic

Bitcoin Classic was the second failed attempt which was made to fork Bitcoin. The proposal had huge support from Bitcoin companies and mining pools. Like XT, a lack of support for the proposal in the whole  Bitcoin community led to the failure of this attempt.

3.      Bitcoin XT

Bitcoin XT was the first unsuccessful hard fork of Bitcoin. developers Gavin Andresen and Mike Hearn were leading the project, XT tried to raise the Bitcoin block size to 8 MB. In spite of support from many large Bitcoin companies, the proposal failed to get enough support from the community and Bitcoin users.disappointed by the lack of support for XT, Hearn announced it a failure and stopped working on the project.

4.      SpaceBit

SpaceBIT was one of the most ambitious projects till date. Branded as “the first decentralized Space Company,” SpaceBIT announced the idea to the world in 2014. The company was trying to launch several “nano-satellites” into space to provide a globally-accessible blockchain, which would be used as bitcoin cold storage and helping unbanked regions access financial services. But, despite all the hype from the community, and all the efforts of the team, SpaceBIT never started any kind of prototype. Later on, the team behind SpaceBIT started a new blockchain company, BlockVerify. A source told that all efforts are currently focused on the new project and that SpaceBIT was totally shelved after March 2015.

5.      Gems

“Gems,” was initially commenced as a social networking platform that used cryptocurrency to pay members that looked for advertisements within the app. But,. At the end of 2014, the company reported a disappointing crowdsale, raising only $111,000 USD. This amount was too small compared to other cryptocurrency projects and hence the project couldn’t achieve success.

6.      Paycoin

 PayCoin was created in 2014 by Josh Garza and GAW miners. They announced calling for new changes in blockchain technology to produce a new kind of cryptocurrency. but, they converted PayCoin into a generic altcoin clone to launch it into the market as early as possible. PayCoin had a huge launch and became one of the largest cryptocurrencies in the world.B ut it started falling soon.With GAW continuously failing to deliver on its promises — one of them was the infamous $20 PayCoin floor — people started losing faith in the currency. GAW totally shut down in 2015, the legal department launched an investigation, and PayCoin became a failure.

7.      DAO

 It is the largest failure in cryptocurrency history: Ethereum’s DAO. DAO was announced in April 2016 . The Decentralized Autonomous Organization — crypto-anarchists and Bitcoinists planned about it for years, and Ethereum finally made it a reality. On June 18, an attacker exploited a weakness in DAO smart contract, which resulted in a loss more than $50 million USD. After circulation of news, traders dumped the DAO token, and prices spiraled downwards.

 After the attack, Ethereum Foundation developers initiated a hard fork of the Ethereum blockchain to roll back the attack and return the stolen funds to their owners. But the proposal initiated opposition throughout the community, with people blaming that such a move was against the rule of blockchain technology. They failed to achieve consensus, and a separate Ethereum block chain was created that operated independently.

 The drama deteriorated the reputation of the Ethereum Foundation, As such; Ethereum has lost much of the respect and prominence it once enjoyed.

 There are many other examples of Hard fork failures in the history of cryptocurrency and it shows the insecurity and fragility of the Cryptocurrency community.

 Conclusion

Inspite of all the failures, the landscape of regular hard forks shows an increase in the overall rise of investment in hard forks. More people are purchasing  and holding, and generating multiple assets as hard forks has become more popular, and the increased holding (hodling) may  increase the demand and hence  the value of cryptocurrency.