What significant hard forks have happened recently and what hard forks are expected this year?
Cryptocurrency hard fork is a creation and implementation of meaningful innovations in software and blockchain code. Most commonly, as a result of these changes, a new branch in the network is being created. It begins to work on its new own rules but doesn’t terminate the connection and engagement with the maternity blockchain. However, it doesn’t always work like this. Sometimes the new and old parts of a blockchain coalesce and thereafter the old part discontinues its work and the new protocol completely replaces the old one. This type of hard fork can be called a renewal. In this article, we will look at the key points of hard forks, and review the upcoming hard forks 2020 as well as the hard forks that have already been successfully brought to life.
As it was said above, the result of a hard fork is two self-consistent blockchain systems. What happens next may follow one of these scenarios:
- A new network, that was created as a result of the hard fork, becomes more convenient and attracts the attention of new and old users. As a consequence, the maternity system stops to function due to the lack of demand and users’ support and activity.
- The hard fork fails and the new blockchain slowly stops working. It happens because of the lack of users and miners. Meanwhile the old network continues its work.
- Both blockchains work alongside but don’t depend on each other. This case can take place if both new and old blockchains have strong support from the community.
Let’s remember interesting examples of hard forks that happened in the past: what was with blockchains and how cryptocurrencies were developing. Let’s also see what hard forks are expected this year.
Many people remember that Bitcoin SV appeared as a result of a Bitcoin Cash fork (which also was a result of one fork – a Bitcoin fork). What happened with the Bitcoin SV network then? On July 24th, 2019, the Quasar update was launched which allowed to increase the block size (previously it had a 128 MB limit).
However, nodes in the Bitcoin SV network were divided not into two, but into three chains. The first group included 65% of nodes, the second group with 19% of nodes remained in the old pre-hard fork chain, and 17% simply got stuck on one of the large blocks, which size was 210 MB (this block contained 808 633 transactions). This hard fork did something that was not there before, all nodes were divided into three groups.
Ethereum Classic & Callisto Network
There is a great case of a new blockchain which appeared after a hard fork. Now these cryptocurrencies are traded quite well and developing independently from each other.
Ethereum Classic blockchain and the ETC coin appeared due to the Ethereum hard fork in 2016. It happened after a hacker broke into the network and the funds of DAO Ethereum investors were stolen.
But let’s consider Callisto Network which is a hard fork of the Ethereum Classic blockchain. Callisto (CLO) can be mined using the PoW algorithm. It is traded on large exchanges such as Bitfinex, HITBTC, and STEX. The coin has great support among the community: you can check this by going to it’s official Twitter, Facebook, or Reddit page.
Obviously Callisto does not have such popularity as its maternity ETC blockchain, nevertheless, the project is alive and developing. This hard fork primarily affected the increase of the Ethereum Classic price, since it was assumed that after the blockchain splitting, each holder of this coin would receive 10 CLO on the balance. The fork itself is the development of the ETC team, which took place on March 5th, 2018.
Monero & MoneroV
MoneroV is the Monero hard fork that took place on April 30th, 2018. The MoneroV blockchain contains a history of all Monero transactions up to 1564965.
Monero owners got 10 times more MoneroV coins, because 1 Monero = 10 MoneroV. In this hard fork, there was an attempt to implement the MimbleWimble protocol for the first time, but this effort failed. XMV is an example of an unsuccessful hard fork. At the same time the Monero blockchain (and the XMR coin) continues its existence and is constantly evolving as well as new members of the community appear. Unfortunately, one can not say the same about Monero V: this blockchain has died, the network is not supported by anyone, the coin is not traded anywhere.
Hard forks 2020
Ethereum Classic has become closer to Ethereum due to the Phoenix hard fork. Based on the official statements of the developers, Phoenix was the result of a consensus among the ecosystem participants. Already in June, this event brought these networks together for the first time after the split in 2016. The Phoenix hard fork includes the Ethereum Istanbul network protocol updates in the ETC chain.
What happened to the price? Many crypto enthusiasts saw it clearly that the ETC price and the ETH price increased significantly due to this event.
Speaking about this hard fork, which happened on June 5th, 2020, it has to be said that the entire network was updated to version 4.1.1. All wallet owners were asked to upgrade their PIVX wallets to a new version in order to avoid network inconsistency.
This hard fork completely solves the problem of network synchronization. It should be reminded that PIVX is one of the most profitable coins in staking, and is quite popular with those who are actively involved in this activity.
One of the oldest cryptocurrencies called Peercoin had its own hard fork on June 8th, 2020. While Peercoin v0.8 (Mantis) was mainly devoted to upgrading the code base and improving the technical capabilities of software, the development cycle v0.9 (Strider) was devoted to the economics of the Peercoin cryptocurrency.
Both PoW and PoS aspects of the network have been changed. Changes in Proof-Of-Work are quite minimal; in general, the target range between blocks was set to 60 minutes. Making PoW more predictable, the RFC-0019 (Strider) protocol brings inflationary stability to the general system. Long story short, the network will reward active miners more than stakers, while maintaining headline inflation of about 1%. Along with the expected decline in inflation due to an increase in the PoW hashrate, total monetary inflation will remain largely unchanged and will be more consistent.
BEAM hard fork is scheduled for June 28th, 2020. With this update, the blockchain will include:
- The transition from the PoW algorithm of BeamHash II to BeamHash III will be made. Thanks to this, the BEAM coin can be mined more efficiently on a PC, which will significantly increase the number of miners.
- The Lelantus protocol will be activated. This update will significantly increase the anonymity within the network.
- One-way payments will be supported, which will also increase anonymity.
Thus, the resistance to ASIC miners will be increased due to the BeamHash III. Moreover, the protocol of elliptic-curve cryptography will remain with no change, as well as the level of anonymity will increase even greater.
These updates can lead to more convenience and increase attention among users and potential new network participants, which may affect the BEAM coin price.
This hard fork in the Cardano network involves updating the network and implementing the Proof-of-Stake protocol. The update will include staking, which will allow ADA owners to maintain the network in exchange for a reward. This Cardano Shelley hard fork is scheduled for July 29th, 2020. How will this affect the ADA price? We will see, but only during the announcement of the launch date of a Shelley hard fork, the Сardano price has grown by 20%.
A new hard fork of BCH is coming this year. The Bitcoin Cash blockchain appeared in 2017 as a fork of Bitcoin, and now it is expected to have its own. The BCH hard fork is scheduled for November 15th, 2020. It is provoked by the proposal of the Bitcoin Cash ABC development team working on the project to make some blockchain updates. Among these new ideas there is a “Coinbase Rule” that requires 8% of mined BCH to be payed for the protocol development. Although the outcome of this event is not clear yet, there is a chance that the split of the BCH blockchain may lead to the appearance of a new cryptocurrency.
To sum it up, it can be noted that any hard fork confirms the viability of the project and the work of the team on the network updates. Any updates, as a rule, lead to an increase in the value of the crypto, and improve the convenience of using the network.
During the formation and development of the blockchain industry, you just can’t do without any code updates. They are a part of natural selection and an additional opportunity to earn. In case of high-quality updates of cryptocurrency, this approach is only beneficial, and the risks are not as high as it seems at first sight. But it is important to be careful and always look at the situation reasonably.
This article does not contain investment advice or recommendations. It has informational purposes only. Every investment and trading move involves risk. You are the only one responsible for making investment decisions.