The Turkish equivalent of the term fork is “Fork”. Bifurcation is the splitting of cryptocurrencies into separate copies in existing blockchain networks to which they are connected. It is not a complete separation, but the creation of a new blockchain network by copying the same database.
Forking can sometimes be done to fix or improve a bug in the system. In some cases, the new blockchain system, which is separated from the blockchain network, can issue its own currency (token).
In order to correct some errors (speed, security, etc.) in the Bitcoin cryptocurrency, a fork has occurred and a new cryptocurrency Bitcoin Cash has emerged.
Bifurcation can happen for many different reasons. Bifurcation may occur due to reasons such as the existing blockchain network cannot meet the demands, the disagreement among the developers. In this case, bifurcation results in two new blockchain networks and two different cryptocurrencies.
Which of the cryptocurrencies that emerge as a result of the bifurcation will come to the fore is a situation that is determined by the exchanges, crypto money users, miners and the market that make up the ecosystem.
The forking process is done in two different ways as “Hard” and “Soft”.
What is a Hard Fork?
Hard Fork refers to the sharp split made on the blockchain network. A new blockchain network is built as an alternative to the existing blockchain network. This process is done to close important security holes in the old network and to add new features.
Users are required to switch to the new network, and users who remain on the old network need to adapt to the new network with the update.
What is Soft Fork?
Soft Fork is the name given to the networks created as a new alternative in the blockchain network. It allows the continuation of the chain in the old network as well as the ability to switch to the new network. It is up to the preferences of miners and users on the old network to update or not.
It is made by developers who believe in the necessity of changing some of the technical features available in the existing network.
What is important in the Soft Fork process is that miners and users mostly accept this new network. With the acceptance of the majority, the Soft Fork can be successful.
Note: As a result of these forks, some exchanges may give gifts of the amount of tokens held or a percentage of newly emerged tokens. The purpose of this is that the newly released token can be traded on the stock market. For this purpose, it is useful to closely follow the new bifurcations. Of course, while following this, you should also examine the stock market news, because the exchange may not give the new tokens that emerge as a result of each fork to its customers.