The term fork can be very tricky to understand in the context of cryptocurrency tokens and coins because the term is also used to refer to a split in the network’s shared ledger (a fork in the blockchain). Since cryptocurrencies are decentralized networks, all participants who mine in a network are referred to as nodes and every one of them needs to follow the same rules in order to work together accurately. These set of rules are known as protocols. Forks follow similar patterns, but each fork is unique in its own way such that different forks result in different outcomes. You want to know and learn more? If yes, then dive in with me and let’s get down to it...
A fork is a change to the blockchain protocol. It’s essentially a divergence from the previous version of the blockchain and can as well be likened to a situation that occurs when two or more blocks have the same block height. When parties are not in agreement, alternative chains may emerge. A fork might happen due to the difficulty of reaching fast consensus in a distributed system.
A better term for a blockchain fork that leads to two divergent cryptocurrencies is called a contentious fork. In a contentious blockchain fork, users of the original network can choose to use and spend tokens on either or both of the divergent chains. Likewise, both networks recognize these pre-fork balances as valid; so, what this means is that, a user of the pre-fork chain will, by no action of his/her own, have tokens on both networks post-split.
A fork can be accidental. An accidental fork occurs when two or more miners find a block at nearly the same time. The fork is resolved when subsequent block(s) are added and one of the chains becomes longer than the rest. The network will then abandon the blocks that are not in the longest chain, these ones are called orphaned blocks. What this particular fork does is to reverse transactions because there must be certain reason(s) behind the existence of each fork that arises.
There are two (2) major categories of fork in the blockchain space; soft forks and hard forks:
- Soft Fork is classified as a fork in the blockchain which can occurs when old network nodes do not follow a rule that is being followed by the newly upgraded nodes. This limitation encourages older nodes to update to the new protocol since they wouldn’t be as efficient as the newly updated nodes.
- Hard Fork can be used to change or improve an existing protocol, or even to create a new, independent protocol and blockchain. Hard fork usually creates price volatility.
The both kinds of fork basically change how the protocol of a cryptocurrency works.
Forking in a blockchain can sometimes be seen as a disadvantage in that the minting and transmission of the derived tokens/coins from a fork scenario do have their usage policy and are described by the consensus mechanism and blockchain of the underlying network.
Forked blockchains do present a risk of so-called replay attacks whereby spending tokens on one chain might result in a transaction maliciously rebroadcast to the other chain. Some cryptocurrencies have failed to get off the ground as a result of this experience.
As it stands, ALGORAND has got our backs!
Algorand is a blockchain with absolutely no forks. This is due to its unique consensus algorithm, once it appears, each new block is guaranteed to remain on the chain forever. Algorand uses a permissionless and pure proof-of-stake (PPoS) protocol built on Byzantine consensus that ensures full participation, protection, and speed within a truly decentralized network. Each user’s influence on the choice of a new block is proportional to its stake (number of tokens) in the system. Users are randomly and secretly selected to propose blocks and vote on block proposals. All online users have the chance to be selected to propose and vote. The likelihood that a user will be chosen, and the weight of its proposals and votes, are directly proportional to its stake yet there is no special group of users for an attacker to target.
In other words, the Algorand blockchain never forks; two blocks can never be propagated to the chain at once because only one block can have the required threshold of committee votes. At most, one block is certified and written to the chain in a given round. Accordingly, all transactions are final in Algorand. Once a block appears, users can rely on the transactions it contains immediately and they can be confident that the block will forever be part of the chain, which means the money they receive is safe i.e the Algorand blockchain does not fork. This property implies that every transaction in the Algorand blockchain is final. Algorand is the first blockchain to provide immediate transaction finality.
The PPoS that Algorand uses has numerous benefits over the other blockchain consensus algorithms such as Proof-of-Work (PoW), Delegated Proof-of-Stake (DPoS), and Bonded Proof-of-Stake (BPoS):
- The ALGO token of Algorand is a true medium of exchange on the platform. Irrespective of how fast the underlying communication network can be, Bitcoin and other PoW projects produce blocks slowly. Even if a block could be circulated throughout the network in a few seconds, Bitcoin would still need to generate a block every few minutes so as to keep the chance of a fork sufficiently low. While in the case of Algorand blockchain, because it does not fork, it produces a block as fast as it can be circulated throughout the network. With blocks finalized in seconds, Algorand’s transaction throughput is as good as large payment and financial networks.
- Algorand’s consensus protocol does not require participants to solve cryptographic puzzles in order to propose or validate blocks. Any user who is online and possesses stake is eligible to participate in the consensus protocol. And block generation does not require any expensive computation i.e participation cost, both communication overhead, computational and financial is very low and hence not a barrier to participation. This allows for blocks to be propagated within seconds. Therefore, the protocol is able to scale to millions of users and at the same time sustain a high transaction rate.
- Algorand’s PPoS approach ties the security of the whole economy to the honesty of the majority of the economy, rather than to that of a small subset of the economy. The system is secure when most of the money is in honest hands. With other consensus processes, a small subset of the economy determines the security of the whole economy, which means just a few users can prevent other users from transacting. In Algorand ecosystem, it is impossible for the owners of a small fraction of the money to harm the whole system, and it would be foolish for the owners of the majority of the money to misbehave as it would diminish the currency’s purchasing power and ultimately devalue their own assets.
- With Algorand’s PPoS, malicious users do not gain any advantage by splitting their stake into many accounts either by pretending to be many users or by pooling into a single one. A user can only increase his influence just by increasing his stake.
- PPoS unlike BPoS does not require users to set aside part of their stake in order to participate in the consensus protocol, and participating in the consensus protocol does not reduce a user’s ability to spend their stake. In Algorand, users are free to spend their stake at any time. No stake is ever held hostage. All stake is always where it should be (in users’ wallets) ready to be spent or in the various financial instruments that the Algorand blockchain underlies.
CONCLUSION
The decentralized nature of public blockchains means that participants on the network must be able to come to an agreement as to the shared state of the blockchain. The unity of consensus among the network nodes results in a single blockchain that contains verified data that the network asserts to be correct. However, many times, nodes in the network can’t come together and appear as a united consensus regarding the future state of the blockchain. This results to forks, meaning that it leads to a point in which the ideal single chain of blocks is split into two or more chains. On account of the open source nature of blockchain and as more individuals and organizations with differing goals enter the crypto space, forks are will continue occurring in the development of cryptocurrency. But thanks to Algorand, a blockchain with no fork, no uncertainty. Algorand is undoubtedly one of the most interesting scientifically backed blockchain projects presently emerging. What Algorand proposes is quite revolutionary, in terms of how the network is designed to have no fork, plus the project is backed and supported by some prominent persons within the crypto space.
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