A few months ago, acronyms like UAHF and UASF were meaningless to most cryptocurrency users. In the past few months, however, the two split-related acronyms have become firestorms of controversy.
What’s the difference between a soft fork and a hard fork? Find out everything you need to know about UAHF versus UASF today.
What Are Hard And Soft Forks?
Both a hard fork and a soft fork are changes in protocol. They’re a change to the protocol (i.e. the rules) on which bitcoin runs. The two proposed changes in protocol we’re dealing with today include:
UAHF: User Activated Hard Fork
UASF: User Activated Soft Fork
A hard fork is a radical change to the protocol. Hard forks make transactions that were previously invalid valid. They also make previously valid transactions invalid. That’s why for a hard fork, all nodes or users are required to upgrade to the latest version of the protocol software. A hard fork is a permanent divergence from the previous version of the bitcoin blockchain. The newest version will no longer accept nodes running the old version of the bitcoin blockchain.
A soft fork is much less dramatic. A soft fork is a change to the software protocol where only previously valid blocks and transactions are made invalid. Since old nodes will recognize the new blocks as valid, soft forks are backwards compatible.
UASF Versus UAHF: The Basics
UASF is a mechanism where the activation time of a soft fork occurs on a specific date enforced by full nodes. This concept is sometimes called economic majority. A soft fork requires major industry support and coordination. The BIP148 proposal (BIP stands for bitcoin improvement proposal) connected SegWit activation with UASF.
UAHF, on the other hand, is where developers add a mandatory
rule set to change the node software. These changes make invalid blocks become valid after a flag day. the hard fork does not require a majority of hash power in order to be enforced. Bitmain, one of the community’s largest bitcoin mining firms, has announced “A contingency plan against UASF (BIP148) in case UASF is applied.
Why Is UASF Vs. UAHF Such A Big Deal?
The short answer to this question is that bitcoin has had some flaws for a long time. UASF and UAHF both seek to solve these flaws in different ways.
SegWit is one proposed solution. However, major mining firms (including Bitmain and Bitcoin Unlimited) do not support SegWit.
That’s why the introduction of SegWit could split the entire bitcoin community. Some users and miners will accept the new standards, but others would continue to use the older version of bitcoin’s code. This would be less than ideal.
UASF and UAHF are both proposed as ways to avoid this split. By picking either UASF or UAHF, we can preserve one blockchain of bitcoin transactions. If some users pick one, and other users pick the other (which will undoubtedly be the case), then we have a problem.
What Has Happened In Previous Soft Forks And Hard Forks?
UASF and UAHF are the two biggest fork variants the cryptocurrency community has ever seen. However, they’re certainly not the only forks in the cryptocurrency world.
Ethereum had the best-known fork experiment. In April-May 2016, Ethereum started a project called The DAO. A month later, a hacker stole funds raised for the project, getting away with a total of over $55 million USD in Ethereum.
The Ethereum community was faced with three options:
- Accept the theft, accept the losses, and take no action
- Rollback the blockchain to a time before the theft (i.e. a hard fork)
- Accept all transactions to the hacker’s wallets as false and return the funds back to investors (i.e. a soft fork)
The Ethereum community eventually chose the second option (a hard fork). However, this decision was controversial. Many users liked the fact that cryptocurrencies have an immutable record of transactions. By rolling back the blockchain, it violated a fundamental concept of cryptocurrency.
By the time the dust settled, here’s what happened: some Ethereum users rolled back the blockchain to the time before the theft (the hard fork option), creating the first chain. Today, we call this first chain Ethereum (ETH). Other users accepted the theft, creating the second chain. We call the second chain Ethereum Classic (ETC).
What Will Happen With UASF And UAHF?
If you’ve read any bitcoin blog, forum, or news website lately, then you know that this issue is complicated. There are a large number of outcomes. Nobody knows what’s going to happen, and everybody is playing their cards close to their chests. Coinbase and GDAX has made their decisions [as you can see in this email] to stick with UASF.
Here are some of the possible outcomes with the UASF and UAHF breakdown:
Option 1) The majority of users and miners accept the plan. This would be an ideal solution because there would be no fork, and there would only be one branch of the bitcoin blockchain.
Option 2) Most users accept the plan, but miners do nothing. If the majority of users (more than 51%) accept the plan, then there will be one branch. However, if a minority of users accept the plan (less than 51%), then there will be two branches (a “Users’ Fork” and a “Miners’ Fork”). If the number of users of one particular branch grows and achieves more than 51%, blocks in the Miners’ Fork will be substituted with blocks in the Users’ Fork, which means the Miners’ Fork is wiped out.
Option 3) Users and miners cannot reach an agreement. In this situation, the larger group can attack the smaller one. Any transactions made in the smaller group are dangerous because they can be wiped out. The smaller group could implement some defensive strategies – like making protocol and algorithm changes. However, this could be devastating for a minority group.
Ultimately, regardless of what happens with UAHF and UASF, this is a defining moment in the history – and future – of bitcoin.