LeapRate's Daily Forex Industry Newsletter
Join now to receive first access to our EXCLUSIVE reports and updates.
Screenshot of a breaking news alert e-mail from Q2 2017
With cryptocurrencies becoming more popular and maturing in the investment world in thousands of portfolios, industries and innovations, all of them at some point must go through an upgrade.
For Ethereum, this upgrade will happen on October 17th, and what is known as “hard fork” will come to life. For many investors, the difference between splits (Bitcoin and Bitcoin Cash) and “hard forks” must be clearly defined. The two can be correlated, but not all hard forks lead to splits.
In the case of Ethereum, the hard fork is not expected to lead to a split, according to TheStreet.
They also explained how the hard fork works:
“New cryptocurrencies usually occur when there’s a signal for a new hard fork but there’s no consensus — so a significant enough portion of nodes and miners continue to mine the old chain, thereby introducing a situation with two currencies. For example with Ethereum, we have Ethereum (ETH) and Ethereum Classic (ETC).”
In its essence, a hard fork requires all users to upgrade and is just a change in the protocol of the digital currency. The difference between hard and soft fork is in the pst iterations of the cryptocurrency. In a soft fork, older version of the currency is possible to work, when the change is “backwards compatible”. In the case of Ethereum, the fork is hard and all users must upgrade to the newest version, as the protocol change is backwards incompatible.
Hard forks and changes are sometimes desired, sometimes not. The whole community and pool of users must agree that a change is welcomed, and this is a non-contentious hard fork. However, when there is no agreement, the hard fork is a “contentious” one and can lead to quite trouble for users. According to The Street, contentious hard forks led to the separation of Bitcoin (now Bitcoin and Bitcoin Cash) and ETH/ETC.
Ethereum has already had three non-contentious hard forks, plus the contentious one that led to ETC, explained the Digital Currencies Investment Analyst at Cumberland Mining in Chicago, Cyrus Younessi.