What is Hard Fork? A hard fork occurs when a blockchain network's protocol undergoes a significant change that divides the network into two branches, one that follows the old protocol and the other that follows to the new one. Let's take a closer look.
What is Hard Fork?
In relation to blockchain technology, a hard fork (or hardfork) is a fundamental modification to a network's protocol that makes previously invalid blocks and transactions valid, or conversely. Every node or user must update to the most recent protocol version after a hard fork.
Developers or members of the cryptocurrency community who become dissatisfied with the features provided by the current blockchain implementations may initiate forks. They may also emerge as a way to crowdsource funding for new technology projects or cryptocurrency offerings.
Why Does It Happen?
Developers may implement a hard fork for a variety of reasons, such as to address critical security flaws discovered in early versions of the software, to add new functionality, or to roll back transactions, as was the case with the Ethereum blockchain's hard fork to roll back the hack on the Decentralized Autonomous Organization (DAO).
Following the hack, the Ethereum community nearly unanimously decided to support a hard fork to reverse the transactions that an anonymous hacker used to siphon off tens of millions of dollars worth of digital currency. Owners of DAO tokens were also able to receive their ether ( ETH) funds back thanks to the hard fork.
The proposal for a hard fork did not exactly unwind the network's transaction history. Rather, it relocated the funds tied to the DAO to a newly created smart contract with the single purpose of letting the original owners withdraw their funds.
DAO token holders could withdraw ETH at a rate of approximately 1 ETH to 100 DAO. The extra balance of tokens and any ether that remained as a result of the hard fork was withdrawn and distributed by the DAO curators to provide "failsafe protection" for the organization.
What is Hard Fork? Why Does It Happen? - Hopefully, this article can help you to get some knowledge.
