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May 1, 2024

What is a Hard Fork?


A hard fork is a software upgrade that has to be implemented by a blockchain. The enhancements that come with the hard fork’s new protocol are often incompatible with the existing blockchain protocol, resulting in two parts — one that follows the previous protocol and the other that follows the new one.

Forks are often initiated by crypto community members or developers who want advanced functionalities that the current network protocol failed to meet. At times, users leverage hard forks as a way to crowdsource for building new technology projects.


    What is a Hard Fork?

    A hard fork is like a new update to the software that runs the blockchain. It’s when all nodes in the blockchain need to accept the upgraded software or continue using the old version. If nodes of the new blockchain no longer accept the older version of the blockchain or the older version people disagree on the update, the split begins.

    The split will end up creating two separate blockchains that run parallel with two different protocols. Often, hard forks occur for various reasons, including the addition of new features, enhancing specific functionalities, fixing security issues or improving transaction speed, etc.

    Since both blockchain networks have different protocols, causing incompatibilities, miners will be forced to choose either one of the versions. In general, old-chain users often upgrade to the latest version to enjoy the enhanced features.

    Hard forks have always been inevitable, and here is a history of Bitcoin hard forks.

    How Does a Hard Fork Work?

    How Does a Hard Fork Work?

    Let’s look at blockchain technology first to understand the hard fork better. A blockchain is nothing but a decentralized database with a record of transactions stored in blocks. Additionally, the blocks carry a set of instructions called protocols that direct how the blockchain network should function.

    Since the blockchain is decentralized, any changes made to the transactions or instructions will be intimated to all nodes for approval. In case of making significant changes to an existing blockchain, a hard fork needs to be created and approved by all nodes to create a new blockchain. Developers will opt for blockchains that a significant number of nodes agree on when developing new projects.

    A hard fork is more common and often needed in almost all blockchains beyond Bitcoin. Since Bitcoin and all cryptocurrencies are backed up by blockchain technology, just like Bitcoin blockchain, other crypto blockchains also undergo hard forks. For example, if nodes or developers want specific changes in the blockchain, they create a fork with all the updated rules. However, all nodes should accept the rules for implementing the hard fork. Bitcoin Cash and Bitcoin Gold are some of the hard forks of Bitcoin.

    Why Do Hard Forks Happen?

    Technologies advance very quickly in every other industry, especially the crypto sector. Thus, developers often explore the cryptocurrency’s base code to enhance it according to the evolving needs and current industry trends.

    Software upgrades lead to hard forks for various reasons. For instance, it could be to add new features or functions to make the blockchain more competitive than other blockchains or enhance the existing blockchain’s overall security.

    However, all nodes in the blockchain network should come to terms with the new protocols. But, in most cases in the past, community developers often didn’t accept the changes. That, in turn, leads to different versions of cryptocurrencies in various blockchains.

    The most significant event that happened in the past is the hard fork of Ethereum. Ethereum Classic, the hard fork of the original blockchain, Ethereum, was created after it underwent security vulnerabilities, resulting in potential financial losses. Ethereum Foundation implemented a new upgrade to restore victims’ funds. That event signifies the importance of a hard fork.

    Hard Fork Vs Soft Fork

    Hard forks and soft forks have some common factors. For example, when the existing software on the blockchain is updated, the old version still exists on the network while the new version is created. However, they have some potential differences. Let’s discuss them in detail.

    Hard Fork Vs Soft Fork

    Though a soft fork seems enough and could fit the objective, it is not that efficient. Developers prefer a hard fork for better performance. On the flip side, creating a hard fork with entirely new protocols demands enormous computing power. But it’s all worth it for enhanced security, privacy, and efficiency.

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    A hard fork is a significant event in blockchain and cryptocurrency as development teams introduce fundamental changes and enhancements or address critical issues within a blockchain network through a hard fork. Despite the complexities associated with a hard fork, like separate blockchains, community fragmentation, and disruptions, it plays a vital role in blockchain innovation. Staying informed about the potential events in the crypto industry will help users explore the possibilities with greater confidence.

    FAQs on Hard Fork

    • Why do users/developers initiate hard forks?
    • Users/ developers often initiate hard forks to implement significant changes or enhancements in the existing blockchain network. That could be security enhancements, protocol changes, or resolving potential problems in the current blockchain, etc.

    • How can users plan for the hard fork?
    • Users should stay updated about upcoming hard forks by following credible resources like cryptocurrencies’ official websites, social media handles, etc. Once the hard fork is created, updating software and crypto wallets to the latest versions will help them manage their crypto assets efficiently.

    • How often do hard forks occur in the cryptocurrency space?
    • The frequency of hard forks varies from one cryptocurrency to another. Some may experience regular hard forks as part of planned upgrades, while others may go through extended periods without significant protocol changes. It often depends on the development goals and the evolving needs of the blockchain network.

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