HARDFORK ECONOMY WILL BE THE DRAWBACK INSTRUMENT

In previous article I wrote a topic about decentralization. There are some benefits of decentralization in economy, politic, social and government administration. However, not all decentralized systems are reliable. There are some drawbacks. Decentralization in politic will make new higher level of local politicians. This can make high tension when conflict arises. In economy and market, there will be deregulation that hurts customers. Some companies may transfer or fire workers to adapt the new regulation. Sharing financial allocation can be a problem within decentralized regions in government administration. This effect to budgeting to new governments.
Pic : https://cryptoharian.com/3-kemungkinan-yang-terjadi-setelah-bch-hardfork/

HARDFORK AND DECENTRALIZATION

The term decentralization has existed since 1820 while hardfork came up in cryptocurrency few years ago.

What is hardfork?

A hard fork (or hardfork), as it relates to blockchain technology, is a radical change to a network's protocol that makes previously invalid blocks and transactions valid, or vice-versa. A hard fork requires all nodes or users to upgrade to the latest version of the protocol software.
https://www.investopedia.com/terms/h/hard-fork.asp
There are two term in forks. They are softfork and hardfork. Softfork will remain one network exist but old version of software should upgrade to the new one. However, the old version software still can participate in the network with limited activities. Hardfork creates split chains. There will be new network created.
Blockchain is known as the decentralized network. The decentralized system in blockchain can split in new chain. The new chain can split again and again. The discussion start from this? How can we sustain in hardfork economy? There are many reasons for hardfork and conflicts of interests in the computing network. My questions is how hardfork effects in economy in real life.

REASONS BEHIND HARDFORK

There are many conflicts of interest why miners determine to do hardfork. Every fork may have different reasons but in general there are three reasons in my opinions.

1.Security


Pic : https://medium.com/swlh/the-story-of-the-dao-its-history-and-consequences-71e6a8a551ee
Security reasons is acceptable by most miners and developers. It took place at ethereum hardfork in the case of DAO. The hardfork secured and rolled back million USD transaction by an anonymous hacker.

2.Disagreement in change of protocols

 Pic : https://cointelegraph.com/news/bitcoin-cash-hard-fork-battle-who-is-winning-the-hash-war
Bitcoin and BCH split is the kind of sample. Bitcoin community split into two scalability problem in the ledger to increase block size from 1 MB to 8 MB. Two communities did not meet agreement and BCH was finally created. What about STEEM VS HIVE? I think you know the answer better than me.

3.Profit Oriented and Scam Hardfork

When hardfork take place, there will be airdrop for new chain. The airdrop is usually 1:1. Bitcoin holders earned the same amount of BCH in the hardfork. This economically profitable for bag holders. Thus, when a coin announce hardfork, there will be huge sales because many traders and opportunists want to earn free money.
Profit oriented and scam hardfork become a way for profit oriented or scam developers to gain their wealth. That is one of the weakness of hardfork economy. While innovative developers are struggling to create better tech and useful creativity, other parties hijacked with money making game using hardfork.

HARDFORK ECONOMY

How can cryptocurrency community promote the tech to common people when there are thousands of hardforks in the future years. That’s a big challenge. Nowdays, the cryptocurrency community is still limited. Most people still underestimate the tech behind cryptocurrency. Economists still see cryptocurrency not as a choice to be future tech in finance and economic tools.
Will a national government accept cryptocurrency as legal currency? Many cases from scam ICOs, shitcoins, scam hardfok like moneroV and Litcoin Cash will make more burden to innovative developers to show and proof that blockchain and cryptocurrency are the future economic instruments.

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