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Hard Fork vs Soft Fork

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You’ve probably heard of a fork by now, but what is it? What’s the difference between a Hard Fork and a Soft Fork?

Definition of a “Fork”

A “Fork” in programming terms is where the existing codebase is taken, and split off into a new path. At the point of the split, they are both identical branches of code, with a shared history. The record of transactions on each of the chains (old and new) is identical prior to the split, however as time goes on, the branches begin to differ. Often it’s used to implement significant changes that the creators or owners of the original code don’t want or can’t implement in the existing code.

Not all forks are intentional. With a widely distributed open-source codebase, a fork can happen accidentally when not all nodes are replicating the same information. Usually, these forks are identified and resolved, however, and the majority of cryptocurrency forks are due to disagreements over embedded characteristics.

Image result for bitcoin fork

Soft Fork

Soft Fork

A soft fork can be thought of as forward-compatible.

If, for example, a protocol is changed in a way that implements tighter rules, asthetic changes or functions that do not affect the structure in any way, then any new version blocks will be accepted by old version nodes. It’s important to note however that the newer, more restrictive version would reject old version blocks.

An example of a soft fork might be an update which restricts the block size limit from 1MB to 500kB. Even though a 1MB block was previously considered valid, full nodes that upgrade to support this soft fork will reject any blocks larger than 500kB after the soft fork.

Hard fork

Graph that represents a Hard Fork process.

A hard fork is a change to a protocol that renders older versions invalid. If older versions continue running, they will end up with a different protocol and with different data than the newer version. This can lead to significant confusion and possible error. An example could be a hard fork which increases the block size limit from 1MB to 2MB. Previously, a 2MB block was considered invalid. However full nodes that upgrade to support this hard fork will accept any blocks up to 2MB in size after the hard fork has activated.

With bitcoin, a hard fork would be necessary to change defining parameters such as the block size, the difficulty of the cryptographic puzzle that needs to be solved, and almost any other factor. Bitcoin Cash was a Hard Fork from Bitcoin. A change to any of these rules would cause blocks to be accepted by the new protocol but rejected by older versions and could lead to serious problems – possibly even a loss of funds.

 

Bitcoin Cash ABC

Today (May 15th 2018), Bitcoin Cash (BCH) Is going through a Hard Fork, called BitcoinABC. This hard fork includes many changes, the most significant being:

  • A Block size increase from 8MB to 32MB.
  • The OP_RETURN data carrier size is increasing to 220 bytes. This will enable smart contracts.
  • Bitcoin Unlimited [BU], the full node implementation for Bitcoin and Bitcoin Cash networks has an important role in the hard fork along with ABC developers.
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What is 0x Protocol (ZRX)?

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0x was founded in October 2016. Co-founders Will Warren and Amir Bandeali had a vision of a future where all kinds of assets, stocks, currencies, precious metals, could be traded publicly on the blockchain as tokens.

0x will be used for powering decentralized exchange

According to their website, “0x is an open, permissionless protocol allowing for ERC20 tokens to be traded on the Ethereum blockchain” and will be used for “powering decentralized exchange.”

A big issue in the cryptocurrency industry (and most industries in general) is that many of the systems used are centralized. Exchanges are entirely open to hacks and other attacks, while a decentralized platform would be much safer for traders. While it’s currently only for ERC-20 tokens, the 0x protocol is trying to address the centralisation issue, meaning exchanges implementing it step above CoinbaseBinance, and other major platforms. (There’s the possiblity that these existing exchanges will move to accept ERC20 tokens in future).

Trading is done via an off-chain relay. This helps to keep the network clear and lowers gas prices that users must pay when trading Ether. With a normal decentralized exchange, trades, deposits, and withdrawals are made through smart contracts.

While this is a step above a centralized exchange, which relies on third-parties to manage transactions, users are still required to pay a myriad of gas fees for each step.

The off-chain relay allows a user to send their order off to another user, a relayer, who then files it. The only trades made on-chain are value transfers.

Relayers transmit orders via public or private networks. Essentially, they are doing the same thing an exchange does. However, the relayer can only document transactions. They cannot execute one.

For a trade to be executed, the recipient (the taker) must submit the signature of the trade maker, alongside their own into a smart contract. The relayer is paid in ZRX, 0x’s currency, for overseeing these transactions.

0x also allows for Point-to-Point Orders, which are simply two users transferring funds directly to one another through a messaging system. Some supported examples are e-mail, Facebook messenger, and others. These orders stay secure by allowing only the recipient’s address to accept the trade.

Finally, 0x can also be used for building decentralized applications. Applications can “plug-in” 0x as a protocol to take advantage of their coin systems, like a government, fund management, or the stability of the 0x token.

The tokenomics

As mentioned, relayers are paid via ZRX for facilitating transactions. Otherwise, this token is used to maintain a sort of government on the network.

Essentially, ZRX token works on a proof-of-stake system, meaning that holders can stake their coin to vote on the future of the entire network. This ensures that users who contribute most to the network get the most voting power, but ones that don’t contribute as much can still get their word in.

0x: the roadmap

0x coin spent a lot of 2017 working to hire new members, host their ICO, launch a beta for their relay system, and release new updates on their network. Now that a lot of their initial work is done, 2018 is to be spent working on the governance system and updating the user interface. The upcoming future means that the 0x team intends to have their governance white paper published and have some new features ready in beta. According to their subreddit, there are plans to support ERC721.

0x: the future of cryptocurrency exchanges?

The 0x protocol could very well be the future of cryptocurrency exchanges. The really fascinating part of it is the sheer amount of flexibility it provides. Watch this space!

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How To Buy Bitcoin Without Coinbase

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Coinbase is a great platform for cryptocurrencies. While Coinbase makes an excellent wallet manager, there are other ways to buy bitcoin which don’t necessitate all the I.D. verification that Coinbase just loves.

So you’re probably wondering how to buy bitcoin without Coinbase while also using a low risk, trusted platform. For those unfamiliar, you can sign up to Coinbase here.

Coinbase: an excellent choice of wallet provider

Firstly, no matter where you buy your bitcoins, or other cryptocurrencies, Coinbase is still an excellent choice of wallet provider. Alternatives exist, but if you just need somewhere to store your balance, then Coinbase is likely your best choice. Don’t forget to enable two-factor authentication.

Because bitcoin is decentralised you can buy or sell bitcoin from anyone in the world. At its most basic, you just need to find someone willing to accept your dollars, euros or pounds who you can trust to send you bitcoin in return. Fortunately, there are buying and selling marketplaces out there that enable exactly this – while providing an escrow service in the middle, to allow both parties to trust the platform.

Other ways to buy bitcoin

The best recommendation for these platforms is LocalBitcoins.com which not online provides and online marketplace, but also real life buyers and sellers in your local area – if cash is your preferred medium!

  • LocalBitcoins is one of the most private ways to purchase bitcoins
  • In some countries it is the only way to buy bitcoins
  • It allows you to buy bitcoins with many payment methods
  • One of the oldest Bitcoin exchanges
  • Not a scam
  • No buying or selling limits imposed by LocalBitcoins
  • Wide range of payment methods available

Additional bonus – LocalBitcoins is private and does not require I.D. verification or any personal information besides an email address to signup. However, you should definitely enable two-factor authentication and while LocalBitcoins itself does not require personal details, some buyers or sellers may request identification before making a trade.

 

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What is a Bitcoin Fork and Why Did It Happen?

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Bitcoin is called as “digital gold”, and rightly so. There has been no other technology that has given massive returns like bitcoin. The cryptocurrency has captured global attention due to its innovative blockchain technology, SegWit proposal, and the news about bitcoin fork giving rise to new cryptocurrency like Bitcoin Cash. Here’s a quick overview of all of these!

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Why Litecoin Is Dying

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Will ripple be on Coinbase?

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What is Ripple?

Ripple is a payment network exclusively created for banks and financial institutions. It enables those institutions to settle transactions faster and cheaper than through their existing back-end systems.

It is comprised of  Ripple Labs, RippleNet and XRP.

Are the odds stacked against it being listed on Coinbase?

In 2015, the CEO of Coinbase, Brian Armstrong, tweeted that Ripple, Stellar and other altcoins were a distraction, and that his focus was solely on Bitcoin and its forks. At the time Ripple had a market capitalization of approximately $250 million, positively small compared to todays $130 billion.

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