Bloomberg today announced that Bitcoin may split 50 times in 2018 as the bitcoin forking craze is accelerating.If you are not a regular follower of cryptocurrency news, you might have missed Bitcoin God which came last month Almost 19 Bitcoin forks came into existence last year.
9/ Both BTC and BCH will continue to hard fork and >10% of the value of each (if held today) will reside in new offshoots.
— Ari Paul (@AriDavidPaul) January 14, 2018
In fact, in the above twitter post, Ari Paul who is CIO of BlockTower Capital, a firm which enables any programmer with basic programming skills to launch a clone similar to Bitcoin, has said that according to the projections Bitcoin and Bitcoin Cash may lose it's 10% of its present value.
To clearly understand what is happening in the crypto-world you have to first understand what is Bitcoin fork.
Usually, the term “fork” is used in multiple software development cycles, but the meaning of fork in cryptocurrencies is bit complex and different. There are three types of forks – hard fork, soft fork and user-activated soft fork.
Consider Bitcoin as a big logbook which records the transactions done by the respective users. In order to make a successful transaction both the users should use the same book. If one of them uses a new book after the transaction, he might claim that he didn’t receive the Bitcoin. The problem with the current system is that since many transactions are taking place every day the pages of the logbook are filled fast.
So, a new logbook might be created to make the record of all the new transactions and also the entries of the old book are also copied. Some of the old log book users might still use the old book and this brings two different log books into the picture.
One result could be that the exchange services should select one logbook to use or can use both the logbooks, selecting the first option could create two coins for the user but the value still might be the same as an inflation of Bitcoins is taking place.
In simple words, the nodes which run the old protocols might consider the transactions made by the new nodes as invalid, so all the nodes of the network need to be updated. However, a portion of the community might still want to play by the old protocols and developers might still provide support for that.
Soft Fork basically prevents the permanent split introduced by the hard fork and this is done by implementing a newer stricter rule for validation. By this way, a majority of the nodes will switch over to the new rules.
In layman terms, the old nodes will accept the transactions made by the new nodes but blocks mined by the old nodes will be considered invalid by the new nodes. The problem with this method is that it could separate the particular network of nodes and make it secular.
User-activated Soft Fork
This is a controversial concept with the idea of upgrading a blockchain which is not backed by the ones who have the network’s hashing power. This concept tries to save time by diverting the power to activating a soft fork to wallets, exchanges or business.
The problem with this method is that most of the exchanges are handled by private, they should opt for voting installing of the new protocols on the nodes which participates in the soft fork.
Air Drip is nothing but bonus or gifts for the miners of the cryptocurrency. This could even be the same cryptocurrency that the miner is holding. For instance, some of the Bitcoin holders got Bitcoin cash in a determined ratio. The ratio depends on the number of miners of the cryptocurrency.
People involved in cryptocurrencies are strongly recommended not to share their private keys with anyone even if they claim to grant over air drops in return.
So Guys That's it I hope You Got an Idea what is Bitcoin Fork ,Types of Fork and what is Air Drop If you still feel some thing missing and some Confusion do ask in below comment we will answer it ASAP.