In this article, you will learn what is a hard fork and how hard forks work. After the Bitcoin which was designed to function as a decentralized digital currency, more specialized currencies have appeared. These new cryptocurrencies didn't just appear from nowhere, many came about as a result of a fork.
In its broadest sense, a fork is simply a change in the blockchain's protocol that the software uses to decide whether a transaction is valid or not. This means that almost any divergence in the blockchain can be considered a fork.
What Is a Hard Fork?
A hard fork, as it relates to blockchain technology, is a radical change to a network's protocol that makes previously invalid blocks and transactions valid, or vice-versa. A hard fork requires all nodes or users to upgrade to the latest version of the protocol software.
Forks may be initiated by developers or members of a crypto community who grow dissatisfied with functionalities offered by existing blockchain implementations. They may also emerge as a way to crowdsource funding for new technology projects or cryptocurrency offerings.
A hard fork can be contrasted with a soft fork.
How Forks Work
A fork in a blockchain can occur in any crypto-technology platform—not only Bitcoin. That is because blockchains and cryptocurrency work in basically the same way no matter which crypto platform they're on. You may think of the blocks in blockchains as cryptographic keys that move memory. Because the miners in a blockchain set the rules that move the memory in the network, these miners understand the new rules.
However, all of the miners need to agree about the new rules and about what comprises a valid block in the chain. So when you want to change those rules you need to "fork it"—like a fork in a road—to indicate that there's been a change in or a diversion to the protocol. The developers can then update all of the software to reflect the new rules.
It is through this forking process that various digital currencies with names similar to bitcoin have come to be: bitcoin cash, bitcoin gold, and others. For the casual cryptocurrency investor, it can be difficult to tell the difference between these cryptocurrencies and to map the various forks onto a timeline. To help sort this out, we have composed a history of the most important bitcoin hard forks of the past several years. Additionally, those looking to get involved with one of the best cryptocurrency exchanges need to tread carefully when investing in currencies like Bitcoin so as not to waste time and money on the wrong digital currency.
Hard Forks vs. Soft Forks
Hard forks and soft forks are essentially the same in the sense that when a cryptocurrency platform's existing code is changed, an old version remains on the network while the new version is created.
With a soft fork, only one blockchain will remain valid as users adopt the update. Whereas with a hard fork, both the old and new blockchains exist side by side, which means that the software must be updated to work by the new rules. Both forks create a split, but a hard fork creates two blockchains and a soft fork is meant to result in one.
Considering the differences in security between hard and soft forks, almost all users and developers call for a hard fork, even when a soft fork seems like it could do the job. Overhauling the blocks in a blockchain requires a tremendous amount of computing power, but The privacy gained from a hard fork makes more sense than using a soft fork.
Bottom Line
There are a number of reasons why developers may implement a hard fork, such as correcting important security risks found in older versions of the software, to add new functionality, or to reverse transactions—such as when the Ethereum blockchain created a hard fork to reverse the hack on the Decentralized Autonomous Organization (DAO). So, you should know what a hard fork is and this article is about what is a hard fork and how hard forks work.
