A fork represents a separation or bifurcation of the original Bitcoin chain, which is carried out by modifications in the Bitcoin protocol and due to those modifications in the protocol, the rules that are responsible for validating the behavior of the entire network, which are none other than the consensus rules, are affected and it is up to the participants to implement them or not.
Depending on the characteristics and impact of the changes, the type of fork could be determined. And also it could be an asset to cryptocurrency for a longer run.
A soft & hard fork
Blockchain networks are governed by rules encoded in the protocol that allows nodes to validate transaction blocks in the same way and remain in consensus. These rules verify that the structure of the block and the transactions included in it, such as the size of the block, are correct.
Sometimes the consensus rules can be modified to add updates or protect the network from attacks, or changed for specific purposes, such as giving birth to a new cryptocurrency. Regardless of the reason for the modification, there are two ways to change the rules: by soft fork, or hard fork.
A soft fork refers to modifications in the protocol that modify the consensus rules and may or may not be accepted by the network participants without implying a separation into two or more parts of the original chain.
On the other hand, a hard fork refers to protocol changes that make outdated software “ILLEGAL”.
This means that if they are not accepted by a part of the intervening parties in the network, that is, they do not have the consensus of the majority, and since they are not compatible so that a single chain can be maintained referring to the one that I update the software and the one that doesn’t, which causes the chain to bifurcate, creating a new one from a particular point in the main chain.
In both soft forks and hard forks, users must participate in updating the network either by downloading new software and starting up updated nodes or by refraining from doing so, if they so decide.
Bitcoin (BTC) has been the most popular cryptocurrency of its time. However, it is not without its flaws. BTC transactions have been notoriously slow to process and have become more expensive over time.
The BTC blocks have been delimited in size, allowing only executing around 2 to 3 operations per second. In addition, while the extraction process is limited, the minimum block size increased to 8 MB; this will help improve transaction processing and will be created up blocks to five times faster.
The cost of BTC transactions has been on the rise, which has been overshadowing its practical applications.
The Bitcoin Diamond was forked from the original bitcoin on November 24, 2017. The main net was updated in December 2017 and it was only in the third quarter of 2018 that it became available in the market.
Bitcoin Diamond (BCD) is a fork that takes the existing bitcoin infrastructure and improves it to support more advanced privacy features and a new currency.
The creators of Bitcoin Diamond remain anonymous with the momentum of the coin mentored by the Bitcoin Diamond foundation. However, they obtained no offer for these coins even at their creation. Instead, bitcoin users at the time of the fork instantly became owners of the innovative BCD coins and received 10 BCD for every BTC they held at the time.
There are only 1000 blocks to be extracted with the PoW component. Mining expects to be the way to remove the remaining blocks, which undoubtedly contributes to users generating interest by having their cryptocurrencies in their wallets.
BCD is considered a hard fork since its creators were looking for three specific characteristics that would improve the conditions of the original BTC and in turn attract new followers who felt identified and attracted by the new fork, these characteristics were the following:
- Faster transaction times
- Lower transaction fees
- Motivation for new users
In turn, Bitcoin Diamond wants to have faster, more affordable, and simpler access than Bitcoin and hopes to achieve this by having a larger block size; having a higher total offer than bitcoin, and finally easier mining.