What is cryptocurrency fork
Recently, cryptocurrency has become the object of generation, investment in speculative processes on target exchanges, and the corresponding exchangers. Successful orientation in terminology, inherent in this area, determines the achievement of goals from mining and ending with the construction of a correct analytical forecast of development.
One of the most common specific concepts of cryptomere, appearing in cryptotheory and in the media, is the "fork" of a particular coin.
Process description in simple terms
The technological base of many cryptocurrencies is the so-called “blockchain” system - a chain of blocks. In this situation, a block is defined as a certain amount of information about transactions in the corresponding system, which are recorded one after another in the order of the chronology.
The blockchain system is a continuous and straightforward chain of transactions. But in the future, the chain can be divided into two, and continue to exist independently of each other.This branching is called the "fork" (translated from English - "fork").
In the process of fork, the program code changes, entailing not only a change in the block structure, but also the possibility of using blocks, the use of which was previously excluded. Thus, at the moment of the fork, the old cryptocurrency is being modernized or being born.
The phenomenon under consideration in the technologically complex crypto-currency world is important. In the absence of this process in the system, sooner or later, a large number of negative problems may appear that adversely affect the functioning of the system. Forks allow to solve the issue of increasing the speed of transactions.
Hard and soft fork - what's the difference?
There are two categories of forks: softfork and hardcore. The etymology of these units allows us to understand the essence of phenomena.
- Undersoftforkthey understand a soft change in the chain, in which there is a rollback to a certain number of blocks, where the code change takes place. In such a situation, a revolutionary change by an outside observer is not fixed.
- Hardforkomis a radical change in the functioning of algorithms and program code.At this stage, the introduction of new technologies, leading to a split system "blockchain". At this point, a new coin appears.
How to make money on the cryptocurrency fork
A cryptoinvestor has a question: how can one make money using forks of cryptocurrency? The process can be divided into two stages.
- Stage number 1.Analytical comprehension of all crypto-validity (news of the crypto market, peculiarities of the structure of a particular coin, possibilities and options for modernization) will make it possible to predict the appearance of a fork. The degree of accuracy of the forecast depends on the quality of analysis. Having correctly predicted the fact of the future fork of the coin of interest, the investor will do half the work.
- Stage number 2.Acquisition of a coin and accumulation of cryptocurrency on a registered wallet (by analogy with a bitcoin fork). The multiplication of the asset will occur twice at the moment of the fork (again, by analogy with the fork of Bitcoin).
What to do next with the coins appeared is another matter. You can sell on the wave of excitement or wait for the time after which to multiply assets by tens and hundreds of times (if, of course, events in the market will develop in the right direction).Or lose the initial investment if the coin is not in demand.
Most popular forks for 2017
In 2017, forks of the most popular cryptocurrency are in demand. We are talking about Bitcoin, who survived about twenty forks. The most famous fork was Bitcoin Cash, the appearance of which took place on 01.08.2017. The essence was to increase the network bandwidth by increasing the parameters of the unit several times.
Bitcoin Gold is considered to be an unusual fork; its rate in December 2017, despite the negative rhetoric of analysts, has grown by fifty percent.
December 12, 2017 appeared another fork - Super Bitcoin. The coin has its own specifics, which can be found on the Internet. How much this specificity will contribute to the growth of prices will be shown by further developments.
Bitcoin God coin was the result of hardfork on December 27, 2017. The main principal feature that distinguishes it from Bitcoin is the use of a proof-of-stake mechanism for confirming transactions.
Expected fork in 2018
In 2018, about fifty forks of only one Bitcoin are predicted, which indicates the growing popularity of the phenomenon in the modern cryptomire.
The reality is complicated by the availability of the resource Forkgen, through which any developer who does not have special talents, can initiate the launch of a new crypto currency on the cloned platform of the old bitcoin. Among other crypto-currencies, forks are also outlined.
Cryptomir with time can be recharged with Ethereum coins:
- Ethereum Uranium.
- Ethereum Star.
- Ethereum Emerald.
Risks and prospects
The quality and prospects of growth in the cost of forks can only guess. On the one hand, the fork should improve one or another side of the coin technology, positively influencing the popularity and, as a result, cost. On the other hand, cost and popularity are things caused by positive rhetoric, a positive information background around the corresponding crypto currency, a belief in its potential investors.
Without confidence in the product, technological upgrades cannot serve as a springboard for cost growth. It is important that before or after the fork, the market believes in an existing or future coin. How to guess that very coin, predicting the development of further events, is the main question of a successful investor.
Only a rigorous analysis of the volatility of the market, and the study of technological features of the alleged fork, will improve the quality of the forecast.
Fork is a widespread phenomenon in the market of crypto-currencies, which allows both to get a potential profit and to lose money, wrongly invested in a coin.
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