Welcome to the Bixiaobao Blockchain Open Course! Our topic today is: what are bitcoin fork and hard fork?
I. What is bitcoin fork?
The Bitcoin fork is essentially blockchain fork.
As we know, Bitcoin generates a block every 10 minutes, and each block contains a certain number of transaction records. The current size of each block is 1M. Assuming that each transaction takes about 1KB, then 1M can contain 1024/1 = 1024 transactions at most, which means that only 1.7 transactions can be finished per second. This is obviously not enough to meet the needs of routine money transfers, so the network is often congested during crowded on-chain transactions.
In fact, the currency first chunk size is 32 m, this power and does not limit in the block size, just at the beginning use less people, each the size of the block size is only a few KB, in order to avoid the waste of computing resources. At the same time, in order to avoid the DDOS attacks to keep the bitcoin system safe, Nakamoto Satoshi limits the block size within 1 m. At that time, the 1 MB more than enough for the bitcoin transaction volume.
However, as more and more people are using Bitcoin, the block size has brought serious problems. In particular, during the bull market in 2016, Bitcoin trading was very hot, but the small block size of Bitcoin backlogged too many transactions in the Bitcoin network, making the transaction confirmation extremely slow. In extreme cases, a transfer transaction may take several days to arrive.
As a result, Bitcoin urgently needs expansion. After three years of discussion, here comes two solutions: soft fork and hard fork.
II. What is a hard fork?
Generally speaking, hard fork is to divide a chain into two, one is the old chain, another is new. The old chain is the for the original community members, who are reluctant to fork, and new chain allows members to improve technologies to generate a new chain on the original one. When hard fork occurs, new blocks are generated, and the data is no longer in sync.
The original chain is just like the Android system. Some people are dissatisfied with the function of the android system, so they developed the iOS, which is similar to hard fork, after which people start to use different systems as they like.
In a nutshell, a new version that is not compatible with the old version is a hard fork.
In history, there have been many hard forks, among which the most famous one is the Bitcoin Cash (BCH) fork event, which gradually divides into two groups: the core development team of Bitcoin and mining rig manufacturers represented by Bitmain The core development team plans to increase the speed of the Bitcoin network through SegWit, while mining machine manufacturers like Bitmain are supporting expansion schemes to increase block size and thus increase transaction speed.
Due to the two sides failed to reach an agreement on the expansion of Bitcoin capacity, on August 1, 2017, the Micro-Bit team supported by Bitmain and other mining machine manufacturers dug out the first block, and Bitcoin hard fork was completed, and Bitcoin Cash was born. Bitcoin Cash has a block capacity of 8M, which can hold more than eight times the transactions of Bitcoin, and is not compatible with SigWit. Since then, the data of the two blocks have been out of sync, and each is managed by a different team. Since most of the developers are from China, Bitcoin Cash has been called the Chinese version of Bitcoin.
In the second year of Bitcoin Cash’s existence, an Australian businessman claiming to be Satoshi Nakamoto, had been one of the proponents of the expansion. He forked BCH, raising the block limit to 128M. After the fork, Bitcoin SV, or BSV, was born.
In the official website of Bitcoins, BCH and BSV have long been ranked in the top 10 by market cap.
III. What is a soft fork?
Compared with hard fork, a soft fork is an upgraded version of the existing code. A soft fork does not create a new blockchain, and the data continues to run on the original chain.
SegWit, for example, is a soft fork for Bitcoin.
If there is at least 51% of the computing power to a new version of the miners, then the network automatically conducts soft fork: at first the old version to create blocks under the new protocol is considered to be illegal, then there will be a short fork. But because the version has higher computing power, a new version of the fork will become the longest chain, so as to complete the upgrade.
IV. hard fork or soft fork, which is better?
In essence, the two types of forking have different functions. It is believed that since every node of the blockchain can participate freely, blockchain is sought after by countless people. Therefore, free choice is equally important. A hard fork splits the community in two, but with supports, it is more democratic.
Soft forks are more robust. In general, since the upgraded version does not conflict with the previous rules, it is compatible with the old plan, and miners do not have disagreements.
Blockchain Open Course is an introductory course on blockchain by BiXiaoBao.
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