What is the ‘hard fork’ about?

Jack Liao, the CEO of LightningASIC, a company that sells mining equipment, came up with bitcoin gold in order to shift this dictatorial dynamic that is uncharacteristic of the concept of Bitcoin. His idea is to let more people with low-end computers mine bitcoin gold, thus eliminate the network’s centralization further and widen its user base.

Definition of ‘Hard Fork’

In relation to blockchain technology, a hard fork (or sometimes called in a singular word: hardfork) is a drastic change to the protocol that makes blocks/transactions that were invalid before become valid (or vice-versa), and as such requires all nodes or users to move up to the latest version of the protocol software. In other words, a hard fork is a deviation, which is permanent, breaking the previous version apart in the blockchain, and users will no longer accept nodes running previous versions, and instead accept the newest version. This creates a fork in the blockchain, in essence. One path will be the new, upgraded blockchain, and the other continues along the old version. In general, after a short period of time, the followers of the older version will realize their state of obsolesce or irrelevance and will promptly upgrade to the latest version.

Breaking Down ‘Hard Fork’

A hard fork can be executed to correct important security risks detected in previous versions of the software, to add new functionalities, or to reverse transactions (similar to how we can use the hard fork to reverse the DAO hack (decentralized autonomous organization) in the blockchain of Ethereum).

Hard Fork

A hard fork consists of splitting the path of a blockchain by making transactions confirmed by nodes, which have not been upgraded to the new version of the protocol software, invalid. Following the DAO breach, the Ethereum community almost voted in favor of a hard fork unanimously to roll back transactions that leeched off tens of millions of dollars of digital currency by an unknown hacker. The hard fork allowed DAO token holders to get their ether refunds, as well.

The proposal did not exactly undo the network’s transaction history. Instead, it relocated the funds tied to The DAO to a new smart contract created with the single purpose of allowing the owners to withdraw their money. DAO token holders can withdraw ETH at a rate of roughly 1 ETH to 100 DAO. Any remaining ether and extra balance resulting from the re-entrancy exploit and the hard fork will be withdrawn and distributed by the DAO curators, or individuals chosen prior to the DAO collapse to provide “failsafe defence” for the organization.

What is the ‘hard fork’ about?

Firstly, it’s essential to understand the mechanism of the bitcoin system. Transactions made by users are gathered into “blocks”. These are turned into a complex math solution. So-called miners will use high-powered computers and work these solutions out to determine whether the transaction is possible. When other miners also confirm that the puzzle is correct, the transactions are approved and the miners will be rewarded in bitcoin.

The need for high-end systems has meant that mining is sort of run by a small group of people with powerful computers.

Jack Liao, the CEO of LightningASIC, a company that sells mining equipment, came up with bitcoin gold in order to shift this dictatorial dynamic that is uncharacteristic of the concept of Bitcoin.

His idea is to let more people with low-end computers mine bitcoin gold, thus eliminate the network’s centralization further and widen its user base.

To this end, the community behind bitcoin gold created a code that creates a “fork” or split in the bitcoin blockchain. This hard fork occurred on October 24 and resulted in the creation of the bitcoin gold cryptocurrency.

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