Standard Types Of Cryptocurrency Soft Forks
What’s the difference?
In our previous articles, we discussed the importance of forks utilized in blockchain, tangle, and hashgraph, revealed the difference between hard and soft forks, and examined special hard forks cases and common hard forks. Now it's time to define the concept of standard artificial soft forks.
Gavin Andresen, the chief scientist at the Bitcoin Foundation, once wrote in his blog that “"soft" changes tighten up the rules”. Basically, soft forking means that some previously correct blocks will be wrong for new nodes, while old nodes will accept all blocks proposed to the chain.
The description of standard cases
Now let’s have a look at all possible types of participants’ behavior amid soft forks:
- A new block created according to new rules arrives to the network.
- Upgraded nodes accept it and attach to their blockchain copies. The new blockchain grows.
- Old-fashioned nodes accept it and attach to their blockchain copies. The old blockchain grows.
- A new block created according to old rules arrives to the network.
- Upgraded nodes decline this block, and their blockchain copies are not updated. The new blockchain is stable.
- Old-fashioned nodes accept it and attach to their blockchain copies. The old blockchain grows as well.
In this case, old-fashioned nodes are at risk of being the participants of the shortest chain. Similar to the previous example, this fork is stable only when new blocks are included in blockchain. As soon as the first block generated by old rules gets attached to the chain, the chain will split and the reunion will be impossible. This can be explained by the main features of blockchain:
- The longest chain is the only correct.
- Participants decline the chain with wrong blocks.
- The hashrate is directly proportional to the probability of creating a new block.
How does it work?
Once the chain splits, two communities appear. The group of old-fashioned nodes mines blocks of both standards. New nodes mine new-fashioned blocks with additional restrictions. As in any default case of blockchain forks, participants cannot switch between the groups without dropping their initial chain, as well as blocks cannot be mined for both chains simultaneously. According to the Longest Chain Rule, in case of a natural fork, the longest chain absorbs the shortest one.
If a new-fashioned chain gets longer, it may overcome the old one and force all old nodes to drop their chain. Given the fact that old nodes accept all blocks in the network, they will definitely join the new chain. Here we assume that the total hashrate of new nodes is significantly higher than the power of old nodes. Every time an old-standard block appears in the network, it will be processed in the same way. Split, then minor separate mining occur — and finally, the old standard wins.
In the opposite case of the chain split, there will be two separate branches that will never overcome each other. The longest old chain will never force new nodes to accept it, because it contains blocks invalid for new nodes. New nodes with less hashrate will never get ahead of the old-fashioned ones. This balance will last until some other changes are implemented.
Soft forks are not as challanging as hard forks. Small communities that would like to get separated from the main network can use this technique regardless of the hashrate they posses. This solution is much more convenient than hard forks that require new nodes to be always ahead of old nodes.
Since forks are quite natural for any blockchain, there is no surprise they occur frequently. In the following articles, we will discuss the most famous examples of cryptocurrency forks.