In the blockchain world, everyone follows the same set of rules. Because there is no absolute authority in the decentralized world, when encountering disagreements, there is a possibility that a unified consensus cannot be reached, and this will also lead to some people proposing new rules. At this time, blockchains based on both new and old rules will appear in the network, which is a fork.
Forks are divided into soft forks and hard forks. Soft forks are temporary forks, that is, all blocks considered legal under the new rules are also considered legal under the old rules, and the old rules also accept blocks created under the new rules. The new and old rules are compatible.
Hard forks are permanent differences in the blockchain. The old rules will not accept legal blocks created under the new rules, and believe that legal blocks under the new rules are illegal, and the new rules will not accept blocks created by the old rules. Generally, after a hard fork, new currencies will appear, but not all forked coins can successfully occupy the market. The success of the newly forked currency depends entirely on its ability to capture market value.
On August 1, 2017, Bitcoin forked for the first time due to a dispute over capacity expansion, and the new currency generated by the fork was Bitcoin Cash (BCH). People who originally held Bitcoin will automatically obtain the forked currency after the fork is completed. In the following months, Bitcoin forked several times, resulting in multiple forked currencies such as BTG and BCD.
People often say that the greatness of the Internet lies in allowing humans to transcend spatial barriers, communicate with anywhere, and realize the globalization and free flow of information. The emergence of Bitcoin is to solve the problems of currency circulation and value transfer. As a means of payment, its purpose is to allow value to circulate freely like information.
Finally, what is obviously different from the previous rounds of bull markets is that in this round of bull markets, due to the laying of compliance channels, the entry of traditional institutions, and the increasing richness of investment tools, the core of Bitcoin has long changed, and the value support has become more diversified. In the foreseeable range, we are witnessing the mainstream development of Bitcoin.
