Cryptocurrency blockchains are always evolving to try and maintain their relevance in the crypto world. However, some also do so to gain more market share and boost their market capitalization. This evolution is termed a fork. It can be defined as an alteration of a blockchain’s protocol used by software to validate transactions. As they do so, this fork may be slight to validate previously invalid transactions, known as a soft fork. But where there’s a radical change in the blockchain protocol, it becomes a hard fork. The article shall look into the necessity of having updated marketing campaigns in such a scenario.
About Hard Forks
A hard fork refers to an extreme alteration done to a blockchain’s network protocol. Such a fork usually results in validating previously invalid blocks and transactions, with the reverse also being true.
To occur, there must be a unanimous agreement by all miners concerning the creation of a hard fork. Both hard and soft forks are initiated by developers or the blockchain members as dissatisfaction with its current functionality. They may, however, do so as means of raising funds for new tech projects through crowdsourcing.
General Repercussions of a Hard Fork
When a hard fork occurs, the number one repercussion is that it necessitates all nodes to upgrade to the latest version of the software protocol. The nodes of the newer version will not accept the older version, while nodes that aren’t upgraded reject the new rules. This results in the creation of an entirely new and separate blockchain.
The second consequence is the debacle for miners’ activities. After a hard fork, miners must choose which blockchain they are to carry out their mining activities. While all miners agreed upon the consensus on forking, both blockchains exist, hence creating the choice issue.
Another key repercussion is functionality and security differences. After a hard fork, the newer blockchain usually enjoys better security, higher privacy, and more functionality functions.
A common occurrence in most new altcoins is that users realize the old blockchain is outdated and hence migrate to the newer blockchain. On the other hand, older ones tend to remain the more popular blockchain even after several hard forks. For instance, bitcoin is still by far the most popular cryptocurrency even after several crucial hard forks.
Pros for Market Campaigns for Hard Forks
Proponents have several arguments that necessitate crypto projects to carry out updated marketing campaigns after a hard fork. These include;
Sensitizing Current Users
The norm in the industry is that after a hard fork, users soon realize that their current blockchain is outdated and make a quick but gradual shift to the new one. Unfortunately, several of these users may make the migration by joining the bandwagon, not knowing just what it is that has necessitated their migration.
With updated marketing concerning a hard fork, users would be sensitized to just what is on offer in the new blockchain beforehand. Furthermore, it would mean that the choice to migrate or stay put would be majorly made after users weigh their options.
Outline the Gains With the New Blockchain vs the Old One
Several hard forks have occurred under the radar, with blockchains whose names closely resemble each other. However, the differences between the two blockchains are not easily deciphered by many new investors in the crypto space.
Such a situation results in the new blockchain losing in on investments thanks to the flaws in the first blockchain. Yet, it may have been a hard fork with the specific aim of solving these issues.
A comprehensive updated market campaign would help outline the benefits of this blockchain over the older one to investors. It may end up attracting more investments thanks to such a clear-up.
Could Result in Strong Crypto Price Gains for the New Blockchain
Hard Forks usually try to address some key issues with the current blockchain. For example, the resultant blockchain is often billed to have better functionalities, more latest technology, or more robust security features.
Such key upgrades are usually quite attractive to whale investors. However, such investors move huge volumes of liquidity around, hence tend to affect prices adversely.
A good updated marketing campaign would increase the probability of the new blockchain bagging whales that weren’t interested in the previous blockchain. This would have upward pressure on its asset price, hence a boost in its market cap and liquidity.
Cons Against Market Campaigns After Hard Forks
There are two major arguments against updated marketing campaigns being a necessity after a hard fork is unjustified costs. They are;
Unnecessary Expenditures on Advertising
The first argument against such marketing is that it may not be justified. After a hard fork and the creation of a new blockchain, the details regarding the gains of the hard fork are usually already public knowledge.
Miners have to all agree on the change to the consensus before a hard fork, hence the public nature of the details. The specifics will naturally sift through to the general crypto world.
This means that an updated marketing campaign will be unnecessary since the details will more or less get to the market.
Could Result in Crypto Price Crashes for the Original Blockchain
An updated marketing campaign that details the gains of the newly created blockchain is a double-edged sword. While it serves to advertise the new blockchain, it has the potential effect of soiling the name of the former blockchain.
The details of such an advertisement would include outlining the specific advantages the newly forked blockchain has over the old one. It can end up dissuading investors in the former from continued hodling of its native coin.
If investors, especially whales, start migrating in masses to the new blockchain, there could be a huge price crash in the original one. This would severely hurt investors who choose to stay put.
Hard forks usually result in a high divergence in the original blockchain, resulting in the creation of an entirely new crypto blockchain. It is, however, a little controversial whether an updated marketing campaign with regards to the hard fork is the right way to go.
Sensitizing current users on the details of the new blockchain as well as clearly outline differences between both blockchains to the public would be of great use. It may also advertise the new blockchain but to the detriment of the original one. The small cost you may incur in a robust crypto-marketing campaign may be as well fully justifiable.