When the Ethereum network launched in 2015, it promised to revolutionize the way we interact with the internet. By allowing users to program decentralized applications, or dapps, on top of its blockchain, Ethereum aimed to create a more open and accessible internet for everyone.
However, Ethereum has faced its fair share of challenges since then. One of the biggest has been scalability.
As Ethereum has grown in popularity, dapps have become increasingly congested, leading to high transaction fees and slow processing times.
In an effort to solve this problem, Ethereum developers have proposed a number of different solutions, including sharding and Plasma. But the most controversial solution is forks.
A fork is a change to the Ethereum protocol that creates two separate blockchains. The original blockchain remains unchanged, but a new blockchain is created from the fork point onwards.
This new blockchain can have different rules and regulations than the original blockchain.
Forks can be used to upgrade the Ethereum network or to create entirely new networks. They can also be used to bail out failed contracts or to reverse malicious transactions.
The most famous Ethereum fork is probably the DAO fork, which occurred in 2016 after a major hack. The DAO was a decentralized autonomous organization built on top of the Ethereum network.
It raised over $150 million in ether from investors, but it was quickly hacked and lost $50 million worth of ether.
The Ethereum community was split on how to deal with the hack. Some wanted to simply refund the investors who lost money, while others wanted to hard fork the Ethereum network and bail out the DAO contract.
In the end, they decided on a soft fork followed by a hard fork. This meant that the original Ethereum blockchain would remain unchanged, but a new blockchain would be created with different rules that would allow for the refund of DAO investors.
The DAO fork was just one example of how forks can be used to upgrade or change the Ethereum network. However, forks can also be used maliciously.
In 2018, there was a major issue with Parity wallets that resulted in over $100 million worth of ether being locked up and unable to be accessed by users.
To solve this issue, developers proposed a hard fork that would change the rules of the Ethereum network and allow for the locked ether to be released back to users. However, not everyone agreed with this solution and so another hard fork was created that didn’t include this fix.
This led to two separate Ethereum networks: ETH (the original) and ETC (the new one with different rules).
Forking is a contentious issue in cryptocurrency because it can lead to splits in the community and cause confusion for users. However, it’s also an important tool for upgrading and changing cryptocurrency networks like Ethereum.