[Crypto] Fork Meaning on Cryptocurrency

Fork Explanation, Updates are common on apps, laptops, smartphones and windows. Updates are done by the application owner's company to update and repair.

Unlike the existing updates on Bitcoin digital assets, Bitcoin has an open source application that means the software can be updated by anyone around the world.

Before the Bitcoin update process, the developer will make a copy of the code and modify it. Fork means that editors or developers (such as miners or full nodes) can program Bitcoin through new programs or older versions.

Fork there are 2 types :

Hard Fork means the update process changes software that does not match / same as the old version. It usually happens because the protocol changes are different from the old ones. If the Bitcoin Miner runs a different Bitcoin software, as a result the Blockchain network separates into 2 networks.

Soft Fork (the opposite of Hard Fork) means the process of updating software whose changes are still in line with the old version of the software. The protocol does not change with previous versions. So, software that has not been updated can still run the application and there will be no branching of a different blockchain system in two. Fork can happen because of different communities and plans to change it.

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Developer, Miner and Full-nodes

The 3 parties who have the right to decide on changes to the Bitcoin protocol network:

Developer
Miner
Full nodes

Develover will usually create a code and correct/update the Bitcoin code.

Miners or bitcoin seekers use Bitcoin software to process creating blocks and verifying transactions to secure the network.

Full-Nodes or Bitcoin users are the ones that store all crypto transaction data. Full Nodes' job is to validate, send, receive and provide data infrastructure such as block explorer, a website that displays blockchain network transactions.

When the developer wants to update the code change, he will first copy the program code before changing it as a backup if there is an error. Once the renewal process is complete, the rest will be given to miners and full nodes, they can choose to use the old version code or the latest version code.

The three parties should be able to plan and agree in terms of the renewal, they are free to argue to achieve a change that will occur in the Bitcoin blockchain system.

Benefits of Forking

Forking has some advantages for investors. The first advantage is from a hard fork. For example, when you have a coin in the old protocol then after the hard fork occurs, the coin will get a double coin count in the new hard fork protocol. Keep in mind that the value of a new coin sometimes cannot survive and cannot have any more value. Investors will benefit from this fork program.

Examples of Fork in Crypto :

BTC on August 1, 2017 there was a change in the Fork Hard system that generates BTC Cash. That is, people who stored 1 Bitcoin before will get 2 Bitcoin Cash.

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It should be noted, the value of the hard fork is not the same. As the example above, the value of BTC at the time of the fork is $3,500 and BCH is only $300. Although Fork has an unequal Value Ratio, it still has the advantage of free coins from Fork.