Understanding Softforks – Exploring Top Bitcoin Softforks

After the introduction of blockchain in 2009, it became clear that the system was not entirely self-sustainable. Problems arose and needed solving. For instance, it became apparent that the speed of transactions was too low as the number of transactions increased. Developers had to introduce upgrades to the system. Thus the concept of blockchain forks arose.

A fork is an upgrade introduced to blockchains changing or improving efficiency. There are two types of forks, soft and hard. However, this guide focuses more on soft forks.

Understanding Softforks

Soft forking is a concept introduced in blockchain technology soon after launch, which involves introducing changes into software. A soft fork is an upgrade that maintains the old blockchain but continues with new updates from the current block going forward. Therefore, soft forks are backward compatible.

Fundamentally, a soft fork is different from a hard fork in that a hard fork is forward compatible. Forward compatibility means that the old chain does not support the upgrade. Thus the network forms a new chain resulting in two chains.

However, a soft fork results in the same chain accepting the upgrade and all nodes working compatible with the upgrade. Hence, the old chain continues to accept blocks coming with the new or old rules. A soft fork introduces upgrades without changing the chain.

Examples of Bitcoin Soft Fork

Related: Why do Cryptocurrency Prices Spike During their Hard Forks?

The Bitcoin chain has been home to multiple soft forks. Each of the upgrades came with something unique. Look at some of the top softforks in Bitcoin and the reason for introduction.

Pay-To-Script-Hash

P2SH is probably the first most notable softfork in the bitcoin network. P2SH occurred in 2012, where developers added a patch in the Bitcoin chain. Immediately afterwards, the P2SH modified how the validation of transactions would occur.

2015 BIP66 Blockchain Fork

BIP in bitcoin is an acronym for Bitcoin improvement proposals. There are several BIP’s that occurred, including the popular ones BIP 34, 65, and 66. BIP66 came into the light in 2015.

The BIP 66 introduction aimed to mitigate malleability attacks in Bitcoin by using strict DER signatures. Although there were slight issues at first, Bitcoin later made the BIP66 official.

Segregated Witness

One of the most famous soft forks that happened in the Bitcoin chain is the Segregated Witness. Popularly shortened to SegWit, this upgrade aimed to provide more efficiency in the blockchain ecosystem. Segwit increased the block size from 1MB to 4MB, meaning more transactions in one block.

Peter Wuille proposed the Segregated witness idea in 2015 but launched it in 2017. The idea was to transform the transactional efficiency of the network

Segwit would reduce the transactional size, therefore giving room for more transactions to take place. It was one of the top upgrades bitcoin did to its network at the time. It was backward compatible, thus no need for a new chain.

Segwit 2x (Proposed But Cancelled)

After completion of the implementation of the Segwit, developers proposed a new upgrade, Segwit2X. They proposed the softfork in 2017 to simplify the transaction efficiency in Bitcoin.

In the Segwit2x upgrade, they wanted to reduce the block size back to 2MB. While this soft fork would happen in 2017, there were consensus problems between project participants. In fact, people who initially accepted Segwit backed out. Thus, the developers cancelled the Segwit2x upgrade.

Taproot Upgrade (Coming Soon)

The Bitcoin network has stayed for several years without actually getting a real network upgrade. However, the Taproot upgrade is coming soon and introduces a world of solutions. The proposal on the Bitcoin taproot upgrade came from Gregory Maxwell in 2018. However, it was only in June 2021 that the Bitcoin network announced a consensus on introducing this upgrade.

Planned to happen in November 2021, the taproot upgrade will introduce a world of solutions to the Bitcoin network. Among the new tools coming with the taproot upgrade include;

• Introducing the Schnorr signatures is one of the best features coming with taproot. Implementing those signatures is designed to enhance the privacy and anonymity of bitcoin users. Schnorr signatures are compression of multiple signatures, thus making transaction tracking impossible. By compressing more signatures will be combined to one, thus reducing space use and increasing efficiency.
• Merklized Alternative Script Trees. MAST works slightly similar to Schnorr but compresses complex information into a simple form commonly called Merkle root.
• Defi and Dapp support. Although bitcoin will not essentially turn into a smart chain, some predict that it could begin supporting Dapps. If that happens, then bitcoin currency could get a new use case as a Defi coin. The lighting network will be capable of hosting smart contracts in a cost-friendly and highly efficient manner.

The Taproot soft fork will introduce more privacy, fewer data processing, higher throughput, and low gas fees. Moreover, this upgrade will mitigate malleability in the Bitcoin chain.

Final Word

This guide has been looking into the idea of soft forks in the blockchain world. A soft fork is an upgrade that changes the rules in a particular blockchain. Once a soft fork happens, the old blockchain will accept the new rules and use them going forward.

Bitcoin has been home to several soft forks that aimed to improve efficiency. However, the upcoming taproot upgrade is perhaps the best of Bitcoin network softforks. It will introduce efficiency, privacy, speed, and most likely Defi support. Generally, if well implemented, Softforks can bolster the efficiency of crypto chains.