A lot of confusion is surrounding the upcoming Ethereum (ETH) hard fork. We want to shed some light on what is going on.
What is a fork?
A blockchain is per definition a chain of "blocks" (which contain data) that is continuously growing. Every participant in the network needs to agree on a common set of rules to achieve consensus. This produces a chain of verified data that everyone agrees is correct.
A fork is a split of a blockchain into two chains, either through a split in consensus (if two miners find a block at the same time) or a change in the underlying rules of the protocol. The first kind of fork is not important, because it will get resolved very quickly when the next block is attached to one of the rival chains, which then becomes the "longest chain" and invalidates the other one.
A change in the protocol rules is permanent and there are two types of these:
- A soft fork:
a protocol upgrade that is backwards compatible with older versions. A majority of participants is not needed and any participant in the network that did not upgrade to the new software can still operate within the network. A soft fork does not result in the creation of a new digital asset or cryptocurrency!
- A hard fork:
a protocol upgrade that is not compatible with older versions. Every participant must upgrade to the new software to continue operating within the network. If there are people who support the minority protocol then the abandoned protocol continues living as a separate chain, for example, Ethereum Classic which was born through a hard fork of the Ethereum protocol. Another example is the creation of Bitcoin Cash, which was a "contentious hard fork", this occurs when the community disagrees about the future of the blockchain. For every protocol change is a majority of participants votes needed, if a group wants to change something at the protocol level but does not get the majority of the votes they can fork off the chain to create a different blockchain. Note: not every hard fork does result in the creation of a new digital asset or cryptocurrency!
The upcoming Ethereum hard fork
The upcoming fork is a co-called "planned hard fork", which means it is a protocol upgrade that is scheduled on the roadmap of the project since the start. The fork is coming at block #7080000, that is ~16. January 2019 and activates "Constantinople", which is a key milestone in the Ethereum roadmap. The upgrade comes with several improvements like optimizing of state channels, delaying the Difficulty time bomb, reducing the mining reward from three to two and new opcodes, among others. The protocol upgrade is supported by a vast majority of Ethereum developers, miners and users. Constantinople is a non-contentious fork. This means that the abandoned chain will die instantly.
This fork does not result in the creation of a new digital asset or cryptocurrency!
Ethereum Nova and other scams
What is going on right now is that several malicious actors are using this confusion right now for scamming. One of these projects is called "Ethereum Nova" and is designed to phish your private keys and steal your ETH.
Note: If you are holding ETH or ERC20-tokens you don't have to do anything for the hard fork. The protocol will be upgraded automatically and all your holdings are safe. Don't let anyone trick you to send or type your private key!
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