What Is Fork In The Crypto Market And Is It Beneficial For Investors ?
by Hodler Ash 
What Is Fork In The Crypto Market ?
Is It Beneficial For Investors ?
The cryptocurrency market is a very unpredictable place where a lot of things will go above your head if you do not know much about the terms. Fork is one of the very frequently used terms of all time in the crypto world and actually the price of a cryptocurrency can go very wild when it is approaching the phenomenon called fork.
Explaining fork will be very complicated without examples and that is the reason why this article brings you all of it. Sometimes these wild rides can be very beneficial for the investors and sometimes it can go very wrong. Whether the price rises or falls, if the investor is smart enough he can capitalise on any of the given scenarios. If you have actually been in the crypto market for quite some time now, you must have at least seen the fork phenomenon happen once. In fact, the sudden rise in the price of Bitcoin around the end of 2017 was also because of this itself.
What Does Fork Mean In The Cryptosphere ?
Fork is basically a situation when a kind of software upgrade or update is done and in such a way that it might be backward-compatible or not be. It is just a fancy name which people in the cryptosphere use. These forks create an alternate version of the blockchain, leaving behind to separate blockchain to run together at the same time on different parts of the network. All process depends on which type of what is happening.
Basically two kinds of forks which are soft fork and hard fork. The forks are backward compatible are called soft forks while the forks which are not backward compatible are hard forks.
What Is Hard Fork ?
Any single software update that makes all the old rules of salete and uses new codes everywhere is called hard fork. Without a doubt, hard fox are always permanent and requires all the nodes as well as the users to upgrade the protocol softwares.
This type of fork basically occurs during to the incorporation of a new feature. Changing the core rules require a huge software update and that is when this phenomenon occurs.
What Is Soft Fork ?
The new rules which are made to the software but do not also obsolete the old rules result in soft fork. The universal update of nodes and softwares are not required in this situation and that is only because the old nodes can recognise the change. In order to make the soft change work however, this type of fork asks maximum of the miners to upgrade.
Why Does A Fork Happen In The First Place ?
When implementing new features into a software after the upgrade, a lot of communities split. This split of community is what causes forks. If elaborated, we can say that it is a kind of divergence where the community decides that the new rules will be followed while the old rules would not be followed on the same blockchain. Change of rules also requires a new blockchain and this new version evolves from the particular block.
The Bitcoin actually underwent a hard fork because the group of users as well as the developers collectively wanted bigger blocks in Bitcoin which is the reason why they introduced a new version called the ‘Bitcoin cash’. The Bitcoin cash had many investors’ eyes after this. This was done on 1st August, 2017 at 12:20 p.m. and ever since then, the wild ride of this particular cryptocurrency started. It reached an all time high in very less time and this is a kind of behaviour an investor can expect out of a specific cryptocurrency after fork.
