✂️ [Analysis] A Brief Study Of Cryptonetwork Forks - Alex Evans

Forks are as ubiquitous as they are misunderstood according to Alex Evans. Forks can be broadly separated into two categories. Chain forks are where the code, ledger, or both are altered, creating a new network separate from the parent chain called a child chain. Code forks, on the other hand, involve tweaking a blockchain's code offline and releasing a separate network with a new genesis block. To date, there have been hundreds of forks, with at least 40 chain forks and numerous codebase forks coming from Bitcoin ($BTC) alone. Through a study of multiple parent and child chains, Placeholder found that:

• The majority of child networks resulting from chain forks are in disuse and have lost significant value relative to their parent networks.
• Child chains have struggled to attract demand and developer talent from parent networks. Both users and developers tend to be loyal to the parent chain.
• Despite less user activity, child chains tend to trade at higher user and transaction (e.g. NVT ratio) multiples than their parent chains.
• Miners exhibit no loyalty to a specific chain and make their decisions based on economics.
• Early evidence shows that the concept of "forking away" network rents, with value moving to a new fork, may not be true.