#Stellar News Hard Forks are Destabilizing to Cryptocurrencies, Study Says
A study published on Environment Systems and Decisions found that cryptocurrencies often do not stand to benefit from hard forks. by Miguel Gomez , 1 hr ago Subscribe
Although hard forks have brought about large contenders in the cryptocurrency space, like Bitcoin Cash and Litecoin, they’ve also resulted in a massive amount of drama, which we’re now seeing as Bitcoin Cash approaches its own unconventional and highly controversial fork.
A new study published in Springer’s Environmental Systems and Decisions journal called Cryptocurrency: governance for what was meant to be ungovernable appears to confirm this, analyzing over 800 unique forks of different coins based on Bitcoin. Spearheading the research effort, lead author Benjamin Trump found that some of these software changes have damaged the stability of cryptocurrencies.
“At a minimum, hard fork growth presents a potential roadblock to the mainstream adoption of select cryptocurrencies and, potentially, a threat to the cryptocurrency’s ability to maintain a stable and predictable operating platform that is essential to its use as a guarantor for daily financial transactions,” the study said .
Although the legacy that Bitcoin brought with it has given birth to successful altcoins, the fork-happy nature of cryptocurrencies themselves could dismantle financial ecosystems due to the controversy that they generate.
Not all of them were hard forks, however.
As the study explains, the majority of the splits that Bitcoin went through up until July 2017 were either “soft” forks or the creation of altcoins.
It wasn’t until Bitcoin Cash emerged that the concept of a hard fork really took shape.
The authors of the study believe that many more hard forks will appear in the future, possibly making Bitcoin unstable:
“Although the number of hard forks has been relatively small (only 2 have been formally adopted), possible future hard forks are expected to grow in number, with some sources arguing that up to 50 are possible in 2018 alone.”
The solution prescribed by the study is to enable a more centralized decision-making process in terms of the direction of software development.
“While it would be counterproductive to the decentralized nature of cryptocurrencies to require a central decision maker to guide governance decisions on hard forks, participants in the Bitcoin network can develop elements of anticipatory governance by identifying potential software challenges early on, and identifying through discourse of various actors what software changes are likely needed to ensure the currency’s long-term survival,” the authors wrote.
This isn’t something we’re likely to see in Bitcoin, but it is possible in EOS, a coin that has an added touch of centralization in its ecosystem and its software development as the brainchild of Block.One.
In the long run, cryptocurrencies need trust in order to inspire mass adoption. So far, Bitcoin has been sitting on this throne for nearly ten years, but another coin with better governance could eventually take its place.
This all depends on the values of the community at large and whether they would prefer to sacrifice some decentralization for the sake of having a more stable coin from a software development standpoint. × Stay up to date with market trends and exclusive crypto news! Subscribe .