Understanding Blockchain Forks And How They Work

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understanding blockchain forks

Blockchain technology has revolutionized the way we perceive transactions and data integrity. At the heart of this technology is the concept of a blockchain, a decentralized ledger that records all transactions across a network of computers. However, what happens when disagreements arise within the community about the direction of the blockchain? This is where the concept of a blockchain fork comes into play. So if you are investing in the world of crypto, understanding blockchain forks and how they work is essential to learn about on your journey.

Understanding Blockchain Forks?

In simple terms, a blockchain fork occurs when a blockchain splits into two separate paths. This split can happen for various reasons, such as disagreements among developers, changes in protocol rules, or differing visions for the future of the network. When a fork occurs, it results in the creation of a new branch, or chain, separate from the original one. The forked chain keeps all the history of the original blockchain up until the point that the split occurs then from that point, they are different chains entirely.

Bitcoin and Bitcoin Cash (BTC/BCH) Fork

One of the most famous examples of a blockchain fork is the split between Bitcoin (BTC) and Bitcoin Cash (BCH) in August 2017. The fork was driven by disagreements within the Bitcoin community regarding the scalability and transaction processing speed of the network. Bitcoin Cash proponents advocated for larger block sizes to accommodate more transactions per block, thus improving scalability while the advocates for the Bitcoin chain were against those philosophies.

The Impact of BTC/BCH Fork

Following the fork, Bitcoin Cash emerged as a separate cryptocurrency with its own set of rules and community. While Bitcoin (BTC) remained the dominant cryptocurrency in terms of market capitalization and adoption, Bitcoin Cash (BCH) carved out its niche, offering faster and cheaper transactions compared to its predecessor.

The Bitcoin community has gone away from the original whitepaper of being a peer to peer currency to more of a digital gold narrative. You can still use it as a currency, but due to not having the ability to scale like Bitcoin Cash, the transaction fees are likely to price many people out of the market.


Another notable example of a blockchain fork occurred within the STEEM community in March 2020. STEEM, a blockchain-based social media platform, witnessed a contentious battle between its stakeholders and the platform’s management takeover by Justin Sun from Tron. Dissatisfied with the centralization and governance decisions being made, the main group of witnesses and community members forked the STEEM blockchain and created what is now called the HIVE Blockchain.

Implications of the STEEM/HIVE Fork

The STEEM/HIVE fork led to the creation of two separate platforms with distinct communities and governance structures. While STEEM retained its original branding and some of the user base, HIVE attracted the majority of the users who sought a more decentralized and community-driven alternative. The fork underscored the importance of decentralized governance in blockchain projects and the power of communities to drive make a change.


Blockchain forks fully exemplify the dynamic and decentralized nature of blockchain technology. They represent moments of divergence and evolution within blockchain communities, driven by differing ideologies and visions for the future. Whether it’s the Bitcoin Cash fork’s quest for scalability or the HIVE fork’s battle for decentralization, these events shape the landscape of the blockchain ecosystem, illustrating the power of consensus which is the core of what blockchain is all about. As you can see, understanding blockchain forks and how they work is an essential part of doing your research in this space so that you can invest and trade logically.

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