When the word “fork” is mentioned, the popular piece of cutlery comes to mind, but that is not what this article is going to talk about. Forks, in this context, refers to a technical event that occurs when diverse participants need to agree on common rules. A fork occurs when a blockchain diverges into two potential paths forward, either with regard to a network’s transaction history or a new rule in deciding what makes a transaction valid. Forks have been used in order to add new features to a blockchain. There are two types of forks, hard fork, and soft fork. A hard fork is a radical change to the protocol, that makes previously invalid blocks/transactions valid. A soft fork, on the other hand, makes previously valid blocks invalid.
Bitcoin forks have been happening a lot after the emergence of Bitcoin in 2009. However, the rate at which Bitcoin forks happened in 2017 alone, was alarming. While some are not well known, there are a few others that have become prominent. Many of these Bitcoin forks that have sprung up have claimed that they were forked to correct the perceived weakness in the architecture of the original Bitcoin blockchain. Some of the issues plague the Bitcoin blockchain, however, include slow transaction speed, scalability, lengthy transaction time, and the centralized mining. Initially, it was claimed that Bitcoin hard forks were based on a strong philosophical and technical ideologist. Recently, however, it is becoming perceived as a money-making machine.
When Vitalik Buterin released the Ethereum blockchain in 2014, the crypto space was already rapidly filling up with different cryptocurrencies. Granted, most of them were mere Bitcoin spoofs but the market was slowly taking shape. Most developers seemed keen on improving on the perceived flaws in the Bitcoin protocol without offering much in the way of diversity. The ideas looked the same, design a trustless payment processing cryptocurrency. The introduction of Ethereum, however, changed all of that as the power of the blockchain was increased by several orders of magnitude. Where blockchain was hitherto confined to the payment processing arena, developers were now wiser to the fact that it could offer a lot more.
The Ethereum fork happened as a result of the DAO Hack. On May 2016, members of the Ethereum community announced the inception of the Decentralized Autonomous Organization (DAO). It was built as a smart contract on the Ethereum blockchain and was created by the German blockchain startup, Slock.it. The goal was to build a non-human venture capital firm that would enable investors to make decisions through smart contracts. It was successful, as it amassed $150 million at the time. On June 18, 2016, the story changed. Members of the Ethereum community noticed that someone was siphoning money out of DAO as funds were being drained from the DAO and the overall ETH balance of the smart contract. A total of 3.6m Ether, which was around $70 million had been drained by the hacker in the first few hours. The attacker(s) withdrew Ether from The DAO smart contract multiple times using the same DAO Tokens and this was possible due to a recursive call exploit.
A soft fork was initially proposed as the solution to the problem. The plan was almost coming to fruition, until a bug with the implementation that opened that opened a denial-of-service attack vector, was found. This soft fork was designed to blacklist all the transactions made from the DAO and the fact that such a soft fork is not possible to implement, means that the Ethereum blockchain is immune to transaction censorship. When the soft fork was clearly not the solution, a hard fork was proposed. The hard fork’s sole function was to return all the Ether token from the DAO to a refund smart contract. The new contract will have only one function, and that is to withdraw.
The hard fork, however, did not gain 100% acceptance. The decision to hard fork the protocol in order to return the hacked funds was seen by some as some sort of moral hazard for the cryptocurrency world, calling it a bailout. The pro-hard fork group thought otherwise, as they didn’t see it as a bailout and felt that the exploit was big enough to take action and reverse it. The hard fork proposal was voted on and approved by Ether holders. The Ethereum Classic was born.
The Bitcoin Cash was created from the hard fork of Bitcoin and it was to increase the bitcoin transaction capacity on the blockchain. There was some dissatisfaction with the block size of Bitcoin which slowed down transaction processing time. A number of solutions had been proposed over the years, to deal with the transaction issue, most times, focusing on the block size. But because the bitcoin code was not managed by a central authority, the proposals could take a long time to finalize, and this led to groups which created separate blockchain ledgers using new standards. This was called a hard fork. The fork occurred on August 1, 2017, at block height of 478559. Bitcoin Cash came into existence. This was the first Bitcoin fork. This caused the Bitcoin blockchain to split and the split created two blocks from block 478559 upward. The Bitcoin Cash works like Bitcoin, but way faster due to the increase in block size. Unlike other forks that have emerged over time, the Bitcoin Cash was approved by the Bitcoin Core Team. However, it has been predicted that the Bitcoin Cash was going to be the new Bitcoin in the nearest future; as at November 2017, it was one of the top coins by market cap.
Bitcoin Gold is a digital currency and a hard fork of Bitcoin. The hard fork occurred on October 24th, 2017 at block height 491407. Bitcoin Gold was created to return to the decentralized nature of the BTC, and give ordinary users an opportunity to mine the new digital currency. It was also created to address the increasing centralization of the mining industry that verifies and secures Bitcoin transactions. This was one of Bitcoin’s flaws. The purpose of the hard fork is the restore the mining functionality with common Graphics Processing Units (GPU) in place of mining with specialized Application-specific Integrated Circuit (ASIC), used to mine Bitcoin. The difference between Bitcoin Gold and Bitcoin is that Bitcoin Gold uses the memory hard equihash, as proof-of-work algorithm instead of the sha-256. Apart from this difference, the Bitcoin Gold follows the guidelines of the Bitcoin Core project.
On the 24th of November, 2017, Bitcoin Diamond was forked off from Bitcoin blockchain at block height 495866. The Bitcoin Diamond claims to solve problems such as lack of privacy, slow transaction confirmations, and a high threshold for new members. The pseudonym names of the Bitcoin Diamond are Team Evey and Team 007. The cryptocurrency is however based on Bitcoin Core and does not have much wallet support, other than the BitPie wallet. Bitcoin Diamond uses legacy signing for all non-SegWit transactions and SegWit transactions, and it uses BIP143, unlike BTG and BCH which use BIP143 for all transactions. According to BCD developers though, the altcoin does not need Bitcoin blockchain unlike other forks of BTC.
After the DAO hack, proposals were brought forward in order to stop another hack from happening. The soft fork was proposed, but just a few hours before implementation, a security flaw was found. As a result, the soft fork option was dropped. A more conclusive option was proposed, the hard fork. This did not go down well with everyone, as some people thought it was a bad idea to return hacked funds. The hard fork was voted in, nonetheless, and the Ethererum forked into Ethereum Classic on July 20, 2016, on block 1920000.
Ethereum fog aims to fix the problem of scalability and creates a decentralized world fog computer. The Ethereum Fog, a fork of the Ethereum blockchain, was forked on December 14, 2016, on block 4730660. The fork was scheduled to occur on January 1, 2018, but occurred earlier than planned. The Ethereum Fog uses the same consensus algorithm as the Ethereum. It also aims to build business partnerships for a large fog ecosystem.
The concept of the Ethereum Modification is that founders in every industry can easily have their own blockchain at zero cost. It enables one blockchain, one person. The EMO forked from Ethereum on December 14, 2016, at block height 4730666.