Before we go any further, we want to make one thing very clear. Forks are not necessarily a bad thing. A high-performing platform should always continually evolve and update itself. To do so, it is necessary for a system to go through constant forks. The main problem lies with contentious hard forks which splits the community. So first, let’s look into how forks work, then we will see how contentious forks are extremely detrimental, and finally, we will look into how FLETA prevents controversial forks.

What are Forks?

A fork is a condition whereby the state of the blockchain diverges into chains where a part of the network has a different perspective on the history of transactions than a different part of the network. A fork can be achieved by a soft fork or a hard fork.

What Is A Soft Fork?

A soft-fork is a split in the blockchain which is still backward compatible with the original state of the blockchain. Think of MS Office. Even if you have built a document using Word 2007, you can still open it using Word 2005. Having said that, all the updates that you can enjoy in the newer version won’t be visible to you in the older version.

What Is A Hard Fork?

The hard-fork is not backward compatible with the original state of the blockchain. Once a system goes through a hard-fork, there is no going back. If you do not join the upgraded version of the blockchain then you do not get access to any of the new updates or interact with users of the new system whatsoever. Think PlayStation 3 and PlayStation 4. You can’t play PS3 games on PS4 and you can’t play PS4 games on PS3.

Important Note: Suppose a cryptocurrency goes through a hard-fork and produces chain A and chain B. All the tokens in chain A will be duplicated in chain B. In essence, you are creating money out of thin air.

Contentious Hard Forks and Community Splitting

One of the most important things for any blockchain projects is the strength of its community. A healthy community is a big indicator that people have faith in the project and that it increases the network strength and overall value. The main problem with contentious hard forks is that it splits the community. Let us give you an example with the whole Bitcoin-Bitcoin Cash-Bitcoin SV saga.

Firstly, Bitcoin hard forked over the blocksize-SegWit debate and split into Bitcoin and Bitcoin Cash. Bitcoin Cash then split into Bitcoin Cash and Bitcoin SV. The Bitcoin Cash and Bitcoin SV split has been particularly ugly. It sparked the so-called, “hash wars.” Not only did this plunge the value of the assets but it also broke apart Bitcoin’s community.

Long-term Effects of Forking

Firstly, where a new protocol breaks off from the original one, it dilutes the number of miners or validators available in each chain. Miners are needed because they provide the hash power necessary for the security and overall performance of the crypto asset. When a chain has low hash-rate, it can be easily taken over by the 51% attack. Bitcoin Gold, which is a hardfork of Bitcoin was taken over by the 51% attack.

Secondly, it just floods the market with mostly useless tokens. As we have mentioned before, a hardfork in cryptocurrencies leads to a whole new bunch of tokens. With such a bloated supply, the demand for these tokens is bound to go down, which will affect its price. The crypto market is better off without these useless tokens.

How FLETA avoids Forks

In FLETA’s Proof-of-Formulator system, there are two groups of actors — Formulators and Observers. Five observer nodes are assigned for each Formulator group. Three out of these five must sign off on a block for it to be confirmed. When two blocks of the same height go to the observers, the block that first gets the required number of majority signatures gets added to the blockchain. As such, FLETA’s efficient mechanism makes sure that there is no chance of a contentious hard fork. Plus, to disincentivize formulators from deviating from the normal protocol to serve their own selfish needs, they can be put to a stop via the Formulator Ban Protocol.