Cryptocurrency Hard Forks threaten market stability

The group lead by Benjamin Trump- Postdoctoral Fellow at Oak Ridge Institute for Science and Education, revealed in their paper, that the threat known as “hard forks”, could have been eliminated if there were clear guidelines on software updates that help stabilize cryptocurrency. 

The study -which scrutinized the state of cryptocurrency “forks” by investigating over 800 soft forks and hard forks from Bitcoin (BTC)– reports that while a fair amount of BTC forks and altcoins did not continue more than several months, others could consolidate their existence for years, whereas indications in this context point out to that “hard forks will become more regular, with up to 50 possible in 2018 alone” as the researchers confirm.

On another hand, the study highlighted that cryptos have the potential to change commerce and information exchange on a global scale massively, due to the blockchain technology.

“Disruption of a cryptocurrency’s blockchain in this way might cause people to lose trust in it and its capacity to survive as a reliable vehicle of exchange”, Trump warns.

Remedies recommend that suitable measures could include establishing metrics for key variables that can pre-emptively identify whether software changes are needed well before inflection points arise.

What is cryptocurrency “hard fork”?

In blockchain technology, the term “Hard Fork” refers to a change happening to the protocol, that converts the status of previously invalid blocks/transactions to valid, or the other way around, which results in the need of all nodes or users to upgrade to the latest version of the protocol software.

What triggers a Cryptocurrency Hard Fork?

As cryptocurrency splits in two, it causes hard forks to exist. This happens when the existing code of a cryptocurrency is altered, resulting in both, an old and new version of the cryptocurrency.

A variety of reasons govern the occurrence of hard forks, that sometimes, the upgrades were already stated on the roadmap since the very start. Such a thing is called “Planned Hard Forks”, while at other times they happen due to confilict within the community, which results in the creation of a new chain, the thing that is called “Contentious Hard Forks”- Bitcoin Cash would be a typical example of a contentious hard fork.

Hard Forks Make Us Win!

In the crypto community, holders of the old chain can get new coins for free from the new chain. This is attributed to the existence of hard forks in the system.

Overall, hard forks are regarded to be unavoidable in cryptocurrency. Most of them would be considered legitimate, however, some have been proven to be scams.

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