Forking

A Bitcoin blockchain can diverge into two potential paths since miners do not necessarily collect transactions and contract block candidates in the same way, nor at the same time. Other reasons such as hacking or software upgrades can also lead to path divergence. The splitting patches are called forks. There are temporary forks and permanent forks.

If a permanent fork occurs due to, for example, malicious attacks, a hard fork occurs. Similarly, there is the concept of soft fork. Both hard fork and soft fork refer to a radical change to the protocol. Hard fork makes previously invalid blocks/transactions valid and a soft fork makes previously valid blocks/transactions invalid. 

To remove a temporary fork, Bitcoin protocol dictates that the longest chain should be used. In other words, when facing two paths, a winning miner will choose the longer chain to link a new block. As a result, the longer path continues to grow and the blocks on the losing (shorter) path becomes orphaned. Bitcoin nodes will soon discard or not take the orphaned blocks. They only keep the blocks on the longest chain as being the valid blocks.

In the case of a permanent fork, nodes on the network have to choose which chain to follow. For example, Bitcoin Cash diverged from Bitcoin due to a disagreement within the Bitcoin community on how to handle the scalability problem. As a result, Bitcoin Cash became its own chain and shares the transaction history from the genesis block up to the forking point. As of September 21, Bitcoin Cash's market cap is around $8 billion, ranking fourth, versus Bitcoin's $215 billion.

..................Content has been hidden....................

You can't read the all page of ebook, please click here login for view all page.
Reset