In cryptocurrency, a fork is created when a development team duplicates a blockchain, making specific changes in different aspects with the hope of offering a better version. In some cases, this change might be a divergence (known as a soft fork), or a permanent split (a hard fork) which would ultimately create a new digital currency.
Most digital currencies rely on open-sourced technology, meaning that any project can copy the code and modify it with different levels of change and varying scales of success.
There are several reasons why a fork might happen, such as a proposed change to protocol because a pioneer might perceive a flaw in the algorithm or system of a particular blockchain and might think they have a potential solution.
Ethereum, as the leading ‘second generation’ blockchain, is little different from Bitcoin in the regard that community frictions, divergent ideas, and even get-rich-quick-schemes have been borne on the back of hard forks undertaken on the digital platform.
The story of Ethereum Classic begins with the DAO.
One of the most notable Ethereum projects, The DAO, short for Distributed Autonomous Organization, raised $150m in Ether – during a public crowdsale.
The DAO, in principle, was designed to operate as a form of decentralized venture capital fund. Investors would send Ether to the DAO to receive voting rights, whereafter those had invested (and voted) would democratically decide on which projects to which the DAO should disperse those funds.
Ultimately, the DAO was unable to complete its vision – the project was hacked, and millions of Ether subsequently vanished.
In the wake of the attack, Ethereum’s community voted on a controversial proposal that would change Ethereum’s baseline code to recover the lost funds and reimburse investors. A majority voted in favor of this proposal, which in turn created a hard fork and two separate blockchains.
While Ethereum, as we know it today, proceeded to introduce the change and reimburse investors, a key team of developers remained to back the original Ethereum blockchain.
Known today as Ethereum Classic (ETC), the platform enjoys an active development and trading community and supports new advances distinct from the now primary Ethereum (ETH) blockchain.
Chief among the principles of Ethereum Classic supporters is that blockchains should remain immutable, and that fund-recovery proposals should not be made possible thanks to the ‘slippery slope’ of precedent that they invite.
As the Ethereum Classic website reads, “We believe in the original vision of Ethereum as a world computer you can’t shut down, running irreversible smart contracts.”
Touting itself as the second Ethereum hard fork, Expanse (EXP) is a decentralized cryptographic information, application, and contract platform based on the Ethereum codebase.
Expanse arrived as an Ethereum hard fork instead of an ICO. Expanse’s purview is to develop applications using its own DAO in a self-funded design that rewards its holders, partners, and investors.
Principally, Expanse is designed to be organized, managed, and operated through a decentralized organization, with the view of being fairly distributed, democratically controlled, and community managed.
Expanse’s DAO enables new development projects to be nominated, voted on, and implemented according to the collective opinion in a manner reminiscent of the intent for Ethereum’s failed DAO.
Expanse’s backend is based on the Ethereum Go client, and can be similarly mined through GPU cards.
Touting itself as the ‘enterprised-focused version of Ethereum’, Quorum is a permissioned blockchain platform designed for high speed and high throughput processing of private transactions.
Quorum more specifically a ‘private’ fork of Ethereum, as the project’s codebase was initially based (and still partially runs) on the latter open-source digital platform to begin with.
Quorum is presently being developed in an open-source initiative by JPMorgan Chase – one of the largest investment banks in the world.
Quorum is designed to facilitate both functions in the private and public sections – specifically within the ambit of derivatives and payments. Unlike Ethereum, Quorum is not specifically public – the platform uses zero-knowledge proofs to protect the privacy of parties who would prefer not to reveal their identities nor the details of their transactions to the public.
Designed to become the “standard of Wall Street”, Quorum was intended to be used for the clearing, settlement and cross-border payments, affording participants both with privacy and the efficiency of a blockchain-based platform.
Rumours have circulated indicating that JPMorgan Chase may relocate Quorum into a gestalt company on its own, rather than leaving the initiative to serve as a development project.