Soft Fork and Hard Fork in Simple Words

Many people do not want to understand the subject of cryptocurrency, because they think it is very difficult, and to understand how everything works, it is necessary to spend a lot of time. Indeed, for an unprepared person, some terms may seem very complicated: blockchain, hard fork, soft fork, etc. Of course, if you want to learn how to code, create algorithms or new cryptocurrencies, then you need to get a profile education, which will take more than one year. But if your goal is a trivial desire to understand the basics, then you will need to read just a couple dozen guides, which, by the way, you can find on our website.

In this material, we will tell you in simple words how hard fork differs from soft fork, and also recall the main Bitcoin hard forks.

1. What is soft fork?

Soft fork is the process of software updating or changing the code of a particular cryptocurrency. When conducting softfork, there is no need for a total replacement of computer software that ensures the operability of the coin network. All innovations that are made during the soft fork have full compatibility with older versions of the network. This means that if the coin creators want to cancel this update, they can do it without any problems.

To make it clear for an ordinary person who does not understand the nuances of the blockchain’s work, let us draw an analogy with the denomination of the ruble of the Russian Federation. In 1998, the Central Bank of the Russian Federation artificially raised the rate of the national currency in 1000 times. But after that, old-style banknotes were still in use for some time. If the Central Bank specialists considered this experiment unsuccessful, they could have easily canceled it and returned the previous exchange rate of the ruble.

Basically, soft fork is conducted because of the need to improve the network, as well as the liquidation of detected errors. During these updates, there is no change in the basic principles of the network.

2. What is hard fork?

Cryptocurrency hard fork is a cardinal change of the blockchain network code, which implies the lack of compatibility with older software. Roughly speaking, in the process of carrying out hard fork, a completely new cryptocurrency is being created, which cannot work with the old version within the same network. After hard fork, an alternative blockchain is created and it works on a completely different principle.

To simplify the process of understanding the above information, let’s also give an analogy from real life. Most people know that the euro currency has now been entered as legal tender in the European Union. Its introduction began in 1999. In the process of development, the euro has stopped to depend on the franc or dychmark and has become an absolutely independent currency.

The main reasons why developers spend cryptocurrency hard fork:

  • implementation of improvements that require major changes;
  • elimination of major bugs;
  • a desire to create a new cryptocurrency based on an already working product.

The main hard fork meaning is to create a separate blockchain, which will have its own miners.

3. The main hard forks of the first cryptocurrency Bitcoin

Hard forks in Bitcoin happen much more often than in any other cryptocurrency. Now let’s talk about the main forks what happened in Bitcoin network lately.

Bitcoin TX. This project is noticeable by only the fact it was the first hard fork in the Bitcoins network. The development team led by Mike Hearn held this hard fork in August 2015. The principal difference between the new project and the original Bitcoin was an increased block size (up to 8Mb). This solution would increase the capacity of the blockchain to 24 transactions per second. For the further development of Bitcoin XT, it had to be supported by ¾ of all the miners of the original Bitcoin network. But in fact, the first hardfork got support of only 12% miners. For this reason, the project was forgotten over time, and its network became incapable.

Bitcoin Classic. The developers of this project took into account the Bitcoin XT errors and decided to smoothly increase the block size: initially increase it to 2 MB, and only after 24 months – double it to 4 MB. It occurred in January 2016. But, unfortunately, this hard fork also failed. The reason was all the same low support from the miners. Officially, the project was closed in November 2017.

Bitcoin Cash. As of today, it is the most successful and popular Bitcoin hard fork. It is the only BTC fork, which not only got, but also stayed for a long time in the list of TOP-10 cryptocurrency projects. It was initiated in August 2017. The main advantages of this project over the original BTC are: increased capacity, low commissions. Subsequently, Bitcoin Cash had its own hard fork (November 15, 2018), which slightly weakened its position, but the project is not forgotten and continues to develop.

4. Conclusion

Briefly and in simple words, hard fork definition is a large-scale update of an existing cryptocurrency, in the process of which a new coin appears. Soft fork can be compared with a planned software update, which does not imply the emergence of a new cryptocurrency.

If to look at the history of Bitcoin hard forks, it appears, that no project has even managed to come close to BTC, so far. At the moment, the only more or less successful project is Bitcoin Cash, but developers need to put much efforts to help their brainchild to compete to its older brother.

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CryptoMining.Farm Scam: 30 Victims Lost $1.34 Million

Thirty people have filed complaints to Thailand’s Technology Crime Suppression Division stating that they were victims of crypto mining scam, they allegedly lost 42 million baht ($1.34 million). The police thinks that the amount of victims can be bigger.

According to the victims’ words, the leaders of the scam convinced them to invest money into CryptoMining.Farm, a blockchain-mining website. One anonymous victim said to the Bangkok Post that one of the leaders promised investor an impossibly high return – 70% a year.

The victims signed contracts when they entered the website, the documents said that a customer may withdraw money at any time he/she wanted without any additional condition. However, the situation has changed since August. The victim stated that:

“From August the owner began imposing conditions for withdrawing the money. Then at the start of this month, the site announced it would start paying back investors in 84 installments which would take over seven years to complete. The payments were supposed to be made in foreign currencies [which] is not permitted by Thai laws.”

After a preliminary investigation, the police is sure that not 30, but 140 people became victims of the scam. Moreover, it can be related to a big scandal which happened in August 2018, when a popular Thai actor and his siblings stole about 797 million baht ($25.5 million).

According to the Bangkok Post, the company has two official offices in Bangkok and Chiang Mai, which may make the victims think that the company’s operations are legal.

Thailand treats digital money with caution and tries to regulate it. The Thai Ministry of Finance even issued a document last year where all the country’s cryptocurrency activities were regulated, including the taxation of participants of crypto market.

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Cryptocurrency Prices Today, February 19: EOS Has Increased By More Than 20%, BTC Approaches At $4000

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA, Dash, Monero: Cryptocurrency Rate

According to the Coingecko online platform, Bitcoin (BTC) added 4.1% over the past 24 hours. The price at the time of writing is $3896 per coin.

Cryptocurrencies are growing rapidly:

Bitcoin Cash added 11% over the past 24 hours and costs $145 per coin;

Ripple increased by 8% and costs $0.33;

EOS raised by 21% and its price is $3.57;

Litecoin grew by 6% and its value is $47;

Cardano plus  7% and costs $0.046;

Stellar fell by  9% and its price is $0.087;

IOTA added 7% and its cost is $0.30;

Dash raised by  8% and its price is $87;

Monero became more expensive by 5% and costs $51.

Over the past 24 hours, Ethereum has added 5.6%. The coin rate is $146 per coin.

The total market capitalization is $132 billion. Bitcoin’s share is 51.8% of the total. In monetary terms, it is $68 billion.

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The List of Bitcoin Mainstream Trends Which Will Dominate in 2019

Bitcoin is one of the most famous cryptocurrencies in the world. It is actually the first one, thus, no matter what might be, it has already gone down in history. Even though the cryptocurrency may not be that popular right now, due to various reason, some changes are already inevitable, hence, let us just check on trends which will become a part of everyday life in 2019.

1. Bitcoin ATMs

The number of Bitcoin ATMs is growing rapidly. It is a kiosk which allows a person to buy/sell Bitcoins in cash or by credit card. They actually look like an ordinary terminal, yet, it is connected not to bank account, but to Bitcoin exchange. The number of Bitcoin ATMs in the world accounts for 4292 at the time of writing.

Source: www.statista.com

Such ATMs will definitely encourage people to use cryptocurrency, since now it becomes more understandable for ordinary people. If people get accustomed to use Bitcoin ATMs, then crypto will see a bright future.

2. Central banks and Bitcoin

Some people do not want to get involved in crypto as it lacks regulation, including bank regulation. However, in 2019, one of Bitcoin trends may become partnership between central banks and cryptocurrency.

Several banks have already introduced systems how to work with crypto. Bank of America, for example, has officially patented a system for saving crypto actives for significant corporations. Moreover, this week, one of the biggest American banks, JPMorgan Chase & Co, has announced that it developed its own digital coin – JPM Coin.

Perhaps, such implementations will bring positive effect on the relationships between crypto and financial institutions.

3. Bitcoin in smartphones

Since the beginning of the third millennium, a cell phone has become an integral part of our everyday life. By using a smartphone we can do almost everything that is connected to our work, study, leisure, or hobby. Financial transactions, including crypto operations, are no exception.

On May, 2018, Huawei Technologies Corporation provided users of its smartphones with the opportunity to use Bitcoin wallet BTC.com. At the end of the past year, HTC company released the smartphone Exodus, powered by blockchain. A person can only purchase the phone with digital currencies.

It is too early to say whether these phones will be successful and useful or not, yet still it is very important that world is trying to meet the needs of everyone.

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Cryptocurrency Rate Today, February 18: Bitcoin Overcame $3700, and Ethereum Is At $140

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA, Dash, Monero: Cryptocurrency Rate

According to the Coingecko online platform, Bitcoin (BTC) added 2.8% in the past 24 hours. The price at the time of writing is $3747 per coin.

Cryptocurrencies moved to the green zone:

Bitcoin Cash added 6.49% over the past 24 hours and costs $130 per coin;

Ripple increased by 3.99% and costs $0.31;

EOS raised by 5.99% and its price is $3.01;

Litecoin became more expensive by 1.38% and its value is $44;

Cardano added 3.66% and its cost is $0.042;

Stellar lost 1.68% and costs $0.079;

IOTA added 1.84% and its value is $0.28;

Dash raised by 2.79% and its price is $81;

Monero became more expensive at 5.33% and costs $49.

Over the past 24 hours, Ethereum has added a record-high 12%. The coin rate is $140 per coin.

The total market capitalization is $126 billion. Bitcoin accounts for 52.1% of the total. In monetary terms, it is $65 billion.

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Details About Bitcoin Cash Cryptocurrency And Its Recent Hard Forks

The first cryptocurrency Bitcoin already had several dozen hard forks for its whole history, but all these projects did not receive adequate support and popularity in wide circles. The only branch of the original Bitcoin that really deserves attention is Bitcoin Cash. This cash appeared in August 2017 and immediately chained to itself attracted attention from the entire cryptocurrency community. Subsequently, this project got its own hard fork, which divided the coin into two projects: BCH ABC and SV. In this article, we will discuss this topic in more detail.

Contents:
(please, click the topic to scroll down to it)

  1. What is Bitcoin Cash?
  2. The main features of Bitcoin Cash cryptocurrency
  3. Hard fork BCH on November 15, 2018
  4. Where is it possible to buy Bitcoin Cash now?
  5. Conclusion

1.What is Bitcoin Cash?

Answering in simple words to the question “What is Bitcoin Cash?”, we can say that this is a cryptocurrency project, which is an improved version of the original Bitcoin. This project was formed due to the hard forks of the first BTC cryptocurrency held on August 1, 2017. The main reason for its holding was the disagreement of developers about the future of BTC, in particular, its scaling. As it is known, the Bitcoin blockchain bandwidth is not very large, for this reason, during a heavy load on the network, it is possible to wait for confirmation of transactions for several hours or even days. The development team decided to fix the above problems, thus Bitcoin Cash appeared on the market.

2. The main features of Bitcoin Cash cryptocurrency

As mentioned above, the Bitcoin Cash algorithm is designed to minimize transaction confirmation time. This kind of delays that occur on the original Bitcoin network and they happen due to many factors, including the small size of one block (1Mb). At Bitcoin Cash, this indicator is much larger, its block size reaches 8 MB.

Another fundamental difference between Bitcoin Cash and the original Bitcoin is the inability to extract BCH using specialized ASIC computing equipment. The fact is that for several years already, Bitcoin mining cryptocurrency has been profitable and is available only for large players since it can be mined using so-called Asics. Such equipment is quite expensive and only large miners can afford it. Since the hashrate of the Bitcoin Cash network is much smaller than that of its older brother, it is more cost-effective to mine BCH, using ordinary video cards. This feature makes BCH much more decentralized than BTC.

The third, but not the least important issue that Bitcoin Cash developers were able to solve is the number of transaction commissions. As it is known, miners receive impressive commissions for their work in the Bitcoin network, this is absolutely justified since they incur huge costs. But this hard fork is much less costly to maintain, respectively, users can make transactions and pay low commissions for it.

3. Hard fork BCH on November 15, 2018

The unity of the BCH development team did not last very long – thirteen and a half months, after which the project split into two parts. News about Bitcoin Cash, which filled all the profile media in November 2018, was only about the loud hard fork.

As we all remember, on November 15 last year, the BCH network was divided into two parts: BCH ABC and BTC SV. It worth noticing, that the split in the network was not very friendly. SV’s proponent Craig Wright was extremely categorical and allowed himself angry remarks about the ABC supporters, led by Roger Ver.

All market participants will remember this event for a long time, because literally right after it, the largest (in the last 7 years) drop in the coin rates began in the cryptocurrency market. In just two weeks, the market lost more than 50% of its total capitalization. Up to the end, it is not known how closely these two events are connected, but a partial correlation is definitely traced.

4. Where is it possible to buy Bitcoin Cash now?

To purchase BCH ABC currency is possible using a variety of online exchanges as well as cryptocurrency exchanges.  As for the BTC SV coin, the list of sites that supports it is a bit shorter, but in any case, you can buy SV at large sites (Gate.io, Binance, etc.)

5. Conclusion

So, Bitcoin Cash cryptocurrency is an improved version of the original Bitcoin. It was created by a group of developers who decided to go their own way and review some features of the work of BTC. So how does Bitcoin Cash work?

  • increased block size (up to 8 MB), which significantly speeds up the network;
  • the inability to mine BCH using ASIC, which has a favorable effect on network decentralization;
  • miners can conduct low commission transactions due to network optimization.

Answering the question “how fast is Bitcoin Cash?”, it should be said that the BCH network is able to process about 60 transactions per second. This indicator in the original Bitcoin is located at 7 transactions per second.

Subsequently, Bitcoin Cash was also divided into two separate branches: ABC and SV. This event struck the project a bit and slowed down its development. As of February 2019, Bitcoin Cash ABC takes the 6th place in the global Coinmarketcap ranking, with a total capitalization of just $2.092 billion. As for Bitcoin SV, it takes the 11th place, and its total capitalization is equal to 1.1 billion dollars.

If to talk about forecasts, then with much greater probability, Bitcoin Cash ABC has a much better chance of further development than Bitcoin SV.

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JPMorgan Develops Its Own Cryptocurrency To Speed Up Transactions: Details

One of the biggest American banks, JPMorgan Chase & Co, announced that it developed its own digital coin, JPM Coin, to speed up payments between customers. The statement also said the coin is based on blockchain, that is why improvement is about to come.

Why would the bank create JPM Coin?

JPMorgan explains that clients often faced trouble with the speed of transactions. Sometimes, it takes much longer time to send money than they expected, therefore it is an urgent problem for bank to solve. The head of digital treasury services and blockchain, Umar Farooq, said:

“Many of our clients move money in different ways and they’re looking for a more real-time way to move value around.”

The amount of payments JPMorgan moves every day accounts for more than $5 trillion, thus a number of client demanded to develop digital coin on blockchain to implement instantaneous value transfer. The bank started the development of JPM Coin about a year ago.

Main details of the coin

JP Morgan has become the first American bank to introduce its own digital coin in public. However, it is not a usual cryptocurrency in its true sense.

Ordinary cryptos usually use public blockchain technology that is in open access to everyone. Yet, a JPM Coin uses private blockchain of JPMorgan Chase & Co, and the price of the coin is pegged to one U.S. dollar.

The company said:

“When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalents amount of U.S. dollars, reducing the typical settlement time.”

It is still unclear when the launch of the JPM Coin will be, all we know, there will be a small number of coins in a few months to test the technology.

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