A Cryptocurrency can be ''forked'' in two ways known as a Hardfork & Softfork, that will alter the Blockchain from the previous version. Let's compare both and determine what software update applies to the latest Bitcoin Protocol change
There’s been a lot of talk in the Cryptospace lately about forks, a Hardfork, a Softfork and the way they work. Many people don’t understand what all of that is about, and it makes them feel stressed due to misleading or partial information that is being spread.
So, to clear up the air, we will compare a Hardfork to a Softfork.
Once you finish reading this post, you will know what’s going on within the Bitcoin community these days, and you will be able to better prepare yourself for anything that could happen in the future.
Before we get started explaining Hardfork vs. Softfork, let’s explain what a fork is.
A fork is a methodical word used by some developers in the Cryptospace, working on open source projects. Fork truly means “software update”, because every time you update a program on your phone or pc you have forked from the older version.
A Hardfork is a Mandatory software update that conflicts with the older version.
It refers to a software upgrade that isn’t well-matched with older versions. All members need to upgrade to the new software to be able to participate and validate new transactions.
Meanwhile, the Softfork is a software update that doesn’t conflict with the existing software, and it allows the network to adjust to the new features implemented on the go.
It’s just a software upgrade that is backward compatible with older versions, which means that members that did not upgrade to the new software will still be able to participate in its activities
The number of transactions is increasing every month, and with the current 1mb block size limit, Bitcoin can only handle 4.4 transactions per second.
That created an excess in transactions, and now the only way to get your transactions prioritized is to pay a high enough fee to interest and incentivize miners to highlight your transactions.
That is why, there been debated over creating the two paths to solve this, leaving the community to choose between a Hardfork or Softfork; and, these things have been implemented in the blockchain world, for example, right now Segwit has been created and implemented. Its first instance is a perfect example for a Softfork.
Seg means to separate, and Wit is the transaction signatures it means to separate transaction signatures. It is short for “Segregated Witness”.
Segwit is an update meant to solve transaction malleability, a known quirk in the Bitcoin software. This system is segregated from other transaction data. This would fix an important issue called “Malleability bug” in the Bitcoin protocol; also, it will shrink transaction size in a way that equals having a 2-3mb block size.
You can also find that Bitcoin Cash is a Hardfork of Bitcoin that increases its block size from the current 1MB to 8MB. This is going to allow that more transactions can be processed. This is a perfect HardFork example, as there has been a major software change done to overall Bitcoin protocol resulting in a separate independent Blockchain that is governed by different consensus
