Bitcoin is an open source digital currency which runs on a platform called blockchain. These currencies are software based and need regular updates to maintain a proper working order. Being an open source platform, anyone can make amendments to the code. So any changes made into the software is called a Fork. In 2017 a Hard Fork was created for BTC, and it got divided into Bitcoin and Bitcoin cash. Another Hard Fork is due for 15 November.
In layman’s term Fork is a software update that can be created by anyone. Now, if the changes made into the software is acceptable by the majority of the community, then the Hard Fork is easy. Since Hard Fork always negates the whole blockchain and copies it again to a specified block-number from where the new format of blocks come into account. These new block format leads to chain splitting sometimes if the community is not in proper consensus which ultimately leads to a whole new coin with a whole new chain. While the minor changes which do not change the database structure of a blockchain and have no impact on previous blocks (except the latest and nearby blocks), is known as Soft Fork. Soft Forks are majorly accepted by the community if it has advantages.
How Does Hard Fork work in a system?
Many developers are of the belief that, there should be regular Hard Forks from time-to-time to keep our cryptocurrency a step ahead. Generally, a specific block is set for the Fork in advance, and when the chain reaches that block, an update is installed. If the update gets accepted, everyone needs to download the upgraded database. If you are not satisfied and still want to use the old one then also there is no issue.
Generally, if the Fork is not universal and the update does not get approved it becomes a soft Fork, where the more popular version remains functional.
The reason for the current divide in Bitcoin Cash model arose due to the difference in opinions of two crypto Giants. The present-day scenario is a result of rivalry between the Bitmain Technologies Ltd founder Jihan Wu and CoinBase founder Billionaire Calvin Ayre.
Bitmain Limited wants a software update that will allow them to issue token just like Ethereal Blochain while the CoinBase founder wants an update which might implement the Satoshi Version also known as Bitcoin SV. This Satoshi version takes inspiration from its parent Bitcoin and mainly focuses on increasing the size of the Blockchain.
What Changes the Fork Might Bring in for the Customers
Generally, a hard fork is considered to be the ideal situation as many customers can double their money, given its a hards fork. Since the Fork is arriving on 15th of Nov. people would not be able to use their wallets before the update gets implemented. However, there are third-party wallets specifically made for these circumstances.
The recommended changes for the Hard Fork are:
When the median time past  of the most recent 11 blocks (MTP-11) is greater than or equal to UNIX timestamp 1542300000, Bitcoin Cash will execute an upgrade of the network consensus rules according to this specification. Starting from the next block these consensus rules changes will take effect:
- Remove topological transaction order constraint, and enforce canonical transaction order
- Enable OP_CHECKDATASIG and OP_CHECKDATASIGVERIFY opcodes
- Enforce minimum transaction size
- Enforce “push only” rule for scriptSig
- Enforce “clean stack” rule
A hard fork increases the cost by double since the primary database remains the same. So, when the Bitcoin got divided into Bitcoin Cash, everyone having a Bitcoin got the double value as the Hard Fork resulted in a new format of cryptocurrency accepted by all. The chances of your value doubling up only occurs if you are using a private key wallet compared to the ones provided by crypto exchanges. We would recommend transferring your cryptocurrency to a key based private wallet.
Exchanges that will be supporting the Hard Fork
The top two disputing parties BitMain and CoinBase have already announced that they will be supporting the Hard Fork. Some of the exchanges that will be supporting the fork are mentioned below. Make sure you have an account with these exchanges to get a better deal out of your BCH.
- Ledger Wallet
However, trading of Bitcoin Cash before the Hard fork is banned for at least 90 minutes before the update.
How To Prepare Yourself for the Fork:
In the runup to the Hard Fork event, the prices of Bitcoin Cash has surged by 50% in the last couple of weeks. If you are a BCH investor and uses the services of any of the above-mentioned Exchanges, then you are just fine.
Just like application updates on your Mobile phone, you can download the new data on your system as soon as it is available. First, you need to decide on which side of the Fork you are, once you have decided that, download the updates and you are good to go.
Pros and Cons
Any new update or modification to an existing system can be both good and bad. In this section, we will look at both the aspects in short.
- The update will provide the customer with different choices.
- Like any update, the new Fork will lead to better functioning of the cryptocurrency on whichever side you are.
- If the Fork becomes a Hard Fork and you are using a private wallet, then chances of you making double the amount are quite high.
- More options to invest in.
- Many people are of the belief that dividing these currencies and generating new ones might create a lot of confusion.
- Forks are responsible for unregulated prices in the crypto world.
- If you are not using the right wallet, you might not be able to double the amount.
- New update means an updated database. Thus you have to rearrange the system.
- The fork might also make your previous Miners baseless, as it has been seen the Mining machines created by these Crypto giants stop working with newer versions.