Fork in Cryptocurrency
What is cryptocurrency? Cryptocurrencies are digital currencies which is peer-to-peer network based electronic cash system. It is a distributed network system which doesn’t have any central authority. Cryptocurrencies are Bitcoin, Litecoin, Ethereum and Ripple etc. Bitcoin and Litecoin are rising up in comparison to other cryptocurrencies.
Bitcoin and Litecoin is leading in digital currency. As compare to last three days these currencies has increased by 12%. These cryptocurrency are using ‘Hard Fork’. Hard fork create two blockchain at a time. Example of hard fork is bitcoin cash, and bitcoin gold. It change the protocol of blockchain technology. Which cause in result to change the valid blocks to invalid or invalid blocks to valid. Hard fork cause to a security risk of reverse the transaction.
Hard fork is help to increasing the price of Litecoin. As hard cap of litecoin uses the litecoin cash. Fork basically two types ‘hard fork and soft fork’. Hard fork is able to change the block as vice-versa while soft fork is able to change only valid block to invalid. Here a question is raised how these fork are work? We know that what does hard and soft fork. Also, hard fork is able to change the transaction. Now we will understand the working of hard and soft fork.
Hard fork takes the input as blocks from non-upgraded nodes. It is used to confirm an invalid transaction. Blockchain is normally validate the transaction by blocks from upgraded nodes and follow their rules to complete the transaction process. A blocks from non-upgraded node is follow the upgraded node in network. Suddenly this non-upgraded node split the transaction in two parts.
These two parts break down the process and create a new rule. Now, the upgraded node of blockchain start following new rule of non-upgraded nodes. Hence in result it will be able to reverse the transaction process.
When we are talk about soft fork it is not able to do vice-versa of transaction. It can be able to change the valid transaction to invalid. In soft fork, a block of non-upgraded node is changed the rules of upgraded nodes. But here, a difference between hard fork and soft fork. Hard fork create new rules and make them as default. Means they continuously follow these new rules. While in soft fork it create new rules. It is follow the both new and old rules but try to violate the new rules. So this fluctuation to follow the rules make a valid transaction to invalid. Hence these forks are impact the transaction of cryptocurrency.