Hard forks are a threat to crypto stability, research claims

14 Sep, 2018
by Fifi Arisandi
Hard forks are a threat to crypto stability, research claims

A research on the governance challenges of cryptocurrencies concluded that hard forks are a threat to cryptocurrency stability. 

A study in Springer's journal "Environment Systems and Decisions" conducted by Benjamin Trump (ORISE Fellow, United States Army Corps of Engineers) claimed that the stability of cryptocurrencies are threatened by the split processes, or more familiar as hard forks.

These processes are actually allowed, with some of them are even pre-planned and mentioned on the crypto roadmap from the beginning. 

Read more: What is a hard fork?

In the official announcement, Trump, the lead author of the journal stated that splitting cryptocurrency's blockchain in the efforts to "disrupt" it may cause the loss in trust and the cryptocurrency itself as well as its capacity to survive as a "reliable vehicle of exchange". 

The study reviewed and analyzed more than 800 publicly acknowledged events soft forks, source code forks or altcoins, as well as Bitcoin's hard forks and found out there have been a considerable increase in terms of the number of separate blockchain from the original Bitcoin protocol. 

Despite the successful hard fork cases that managed to last for years, such as Dogecoin, Litecoin, and Vertcoin, the study claimed that many of them couldn't survive beyond a few months. That being said, as many as 50 hard forks are predicted by some experts to happen in 2018 alone. 

Trump also said that mainstream adoption of cryptocurrencies is obstructed by such processes, arguing that, "Hard forks are a threat to maintaining a stable and predictable operating platform that is essential if cryptocurrencies are to be adopted for daily financial transactions."

Furthermore, he added that if Bitcoin seeks to become more "globally recognized, reliable, and predictable" medium of exchange on an international scale, all parties who are involved, such as miners, wallet developers, exchange operators, as well as stakeholders are required to have a good governance that will result in more stability to the coin. 

Lastly, the study also acknowledged the potential of Bitcoin and other cryptocurrencies to revolutionize how commerce and information exchanges are done worldwide with their promising underlying technology. 

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