Crypto Guides

A Simple Guide To Cryptocurrency Fork & Its Types


We have discussed many topics concerning cryptocurrencies in our previous guides. Some of them are basic, and some belong to the intermediate and advanced category. If you have been following us, you would have realized that we have chronologically structured this Crypto Guide series. Because we want you to get a clear understanding of the entire crypto market from a very basic level. Since we have completed most of the basic concepts, let’s go a bit deeper to understand more complex aspects of this space. In our article today, let’s understand the concept of Forking in cryptocurrencies.

What is a cryptocurrency fork?

You must be aware of the software updates that we keep receiving in our smartphones. These software updates typically fix the reported bugs in the existing software version or may add many other features to it to make it more secure and robust. This applies the same for cryptocurrency networks as well. Every network needs an update, and that update is known as ‘Forks.’

However, this is only one of the reasons why Forking is done. There is another crucial reason behind every blockchain Fork that has happened until now. Before understanding that, let’s understand what a Protocol is. It is essentially a set of rules that must be followed by all the existing nodes in a crypto network. Some of the rules in a protocol include Block Size, Rewards, etc. Now, let’s see the actual purpose of a Fork.

The Purpose?

When a significant part of the existing stakeholders like Miners, Developers, etc. do not agree with the updated protocols, the need for the fork arises. In simple words, when a set of important individuals in the network are not ready to follow the newly updated rules, the entire network is forked, and the process is known as Forking. Once the fork is done, a part of the network follows the new rules, and the other set follows the previously existing rules. Now, let’s understand the different types of Forks that occur in a blockchain.

Types of Forks

There are two types of Forks in the world of cryptocurrencies – Hard Fork & Soft Fork.

🍴 Hard Fork

This kind of fork results in the permanent splitting between the existing blockchain. Meaning, the network is completely divided into two and results in two different cryptocurrencies altogether. In a Hard Fork, the old nodes that resist upgrading won’t be able to process the new transactions or add new blocks to the blockchain.

For instance, let’s say after the upgrade, the new block size is changed from 4 MB to 8 MB. If the new node, which is upgraded, processes a block of 6MB, the old nodes consider them as incompatible and reject the block altogether. Each of these blockchains will have a separate community, and developers altogether. One important thing to remember is that all the transactions for the parent blockchain are copied to both of the newly formed ones. That is, if you were a part of a cryptocurrency’s original blockchain, you would be getting cryptos of newly formed ones as well.

To explain this, we would like to take one best example of a hard fork which is the Bitcoin and Bitcoin Cash. Since Bitcoin is the original blockchain, and the hard fork occurred, if you were holding 10 Bitcoins, once the fork is done, you will be receiving ten coins of Bitcoin cash as well.

🍴 Soft Fork

Unlike hard fork, the old nodes that aren’t updated with the new rules can still process the new transactions and add new blocks to the network. Hence there is no need for dividing the entire network into two different networks. The older nodes can upgrade to the new ones whenever they want to, or they can remain the same way. Also, the transaction history will remain intact until the time of the fork.

The only rule here is that the old nodes must not violate the new rules after the soft fork is done. For instance, let’s say a soft fork is done in a blockchain, and the block size is decreased from 8MB to 4 MB. The older nodes can process new transactions and add newer blocks to the network, which are only of size less than 4 MB. If the older nodes try to add a block that is of 6MB, the new nodes will reject it as the updated rules aren’t followed.

That’s about Forking and types of forks in the world of cryptos. These forks are and will continue to be an integral part of the crypto space as the adoption is increasing with time.

Crypto Guides

Have You Heard of Mimblewimble Blockchain Protocol?


We have been discussing many basics of cryptocurrencies and the groundbreaking tech behind them – Blockchain Technology. By now, we know the properties, features, pros, and cons this revolutionary technology possesses. It is evident that more research is being done on continually improving the blockchain technology, which will eventually make the crypto space better. One such innovation in this space is the Mimblewimble protocol. In this guide, let’s briefly understand what this protocol is all about and its successful applications.

What is Mimblewimble?

Mimblewimble is a protocol that has the potential to improve the scalability and privacy of a blockchain. This tech was published in the mid of 2016, and the first successful application of it was in early 2019. This protocol is built on the principles of advanced cryptography known as Elliptic Curve. The main advantage of using this cryptography technique is that it uses relatively smaller keys. Also, a Mimblewimble network doesn’t have any addresses in them and hence taking lesser space in the block.

To put things in perspective, the maximum block size of the Bitcoin network is 4MB. But the block size of a network that runs on Mimblewimble protocol is a mere 400 KB, which is 10% of the Bitcoin block size. But the pros of this protocol are not just confined to the lesser storage capabilities. As the size of a block is small, the scalability of the network increases. Also, the anonymity factor is an additional advantage this protocol offers.

Working of the Mimblewimble Protocol

To clearly understand the working of this protocol and to know how it’s transactions are different from the rudimentary transactions, let’s understand the inputs and outputs involved in a single Bitcoin transaction. In a typical Bitcoin transaction, if you send ten Bitcoins to another person, the network won’t subtract those ten Bitcoins from your account and add those Bitcoins to another person’s account. Instead, the network considers multiple inputs from the older Bitcoin transactions in order to generate an output. This process doesn’t only consume more space but also reduces the transaction speed.

On the contrary, Mimblewimble protocol works more efficiently by eliminating these inputs and outputs. Instead, a multi-signature is used to replace all of the inputs and outputs. In this case, if you want to send 10 Bitcoins to someone, both of you will get a multi-signature key for verifying the transaction. Also, we have mentioned about the elimination of addresses in the Mimblewimble network. This is made possible by including a Blinding Factor. It is used in the encryption of both the inputs and outputs along with the public and private keys of both the parties.

This blinding factor will remain a secret between you and the person you want to send Bitcoin to. This increases the privacy of the transaction you are making as only you, and the receiver knows about the transactions you made.

Bottom Line

Grin and Beam are the two cryptocurrencies that have successfully implemented the Mimblewimble protocol to their respective networks. So we know that these cryptos are incredibly private and scalable as well. Please do your research to understand the properties of this coin better. Innovations like this bring a lot of hope for us and increase the usage of cryptocurrencies in real life.

Fun Fact: The anonymous inventor of the Mimblewimble technology portrayed himself with the name ‘Tom Elvis Judisor,’ which in French translates to ‘Voldemort,’ the famous Harry Potter character. Also, the name Mimblewimble is taken from the Harry Potter series, which means a tongue-tying curse.

Crypto Guides

What Is Adaptive Scaling In Cryptocurrency & How Is It Achieved?


One of the most important motives behind the invention of cryptocurrencies is that they should have the ability to be an alternative financial system. That is, we, the users, should be able to use them just like how the fiat currencies are being used today, but with many more features and ease. While this thought is very ambitious, the journey has already begun with Bitcoin. The total market capitalization of all the cryptocurrencies combined is around $200 BN as of Dec 2019. 66.4% of this comes from Bitcoin alone.

No matter how many cryptocurrencies have come, the craze for Bitcoin didn’t decrease. As this craze was not anticipated during the inception of Bitcoin, the network had to endure scaling issues, i.e., the number of transactions processed per second. New age cryptos are handling scaling issues by incorporating advanced consensus algorithms. But the Bitcoin network wants to stick to the POW as 18 million Bitcoins are already mined out of the permissible 21 million.

Hence it is essential to make some changes to the Bitcoin network to increase its scalability. In this article, let’s see a couple of techniques that have been incorporated in the Bitcoin network to tackle this issue.


SegWit stands for the segregation of witnesses. It is a protocol upgrade that changes the way data is stored in the blockchain network. SegWit was first implemented in Litecoin in May 2017, and later, very shortly, it is also implemented in the Bitcoin network by August 2017. Although the primary intention of this protocol is to fix a bug, the side benefit has taken much more significant importance. When the Bitcoin network started, each block size was limited to only 1 MB. As a result, only seven transactions were processed per second, which limits the potential of Bitcoin in the day to day transactions.

The signatures alone occupy 70% of this 1 MB data in the block. Hence it was proposed to eliminate the signature in the block and increase the number of transactions. By doing this, the number of transactions processed per second is increased while keeping the block size constant. This upgrade also enabled technologists to develop a second layer on the Bitcoin network, which allows smart contract functionality. It is named as the lightning network; let’s understand this concept in detail.

Lightning Network

Lightning network is essentially a system of smart contracts built as a second layer on top of the Bitcoin network. This network allows people to send/receive payments instantaneously with way lower transaction fees by keeping them off the main network.


First and foremost, a payment channel must be set up using a multi-signature wallet. All the involved parties can access this wallet with their respective Private keys. The wallet address is then saved in the public blockchain network. The corresponding parties can make Bitcoin deposits to this wallet.

Once this is done, the parties involved can conduct an unlimited number of transactions without ever touching the main blockchain network. Every time the parties involved conduct a transaction, the balance sheet gets updated with the amounts each party holding.

Though the block size of the Bitcoin network has been increased to further cope up with the scaling issues, these were the two most favorable measures taken at the time when needed to make Bitcoin desirable for day to day transactions. We hope you understood the concept of adaptive scaling in a blockchain network. Stay tuned for more interesting crypto content. Cheers!