Hard Fork

The splitting of a single cryptocurrency into two and results in the validation of blocks and transactions that were previously invalid, or vice-versa

What is Hard Fork?

In blockchain technology, hard fork or (hardfork) refers to a radical change to the protocols of a blockchain network. In simple terms, a hard fork splits a single cryptocurrency into two and results in the validation of blocks and transactions that were previously invalid, or vice-versa. As such, it requires that all developers upgrade to the latest version of the protocol software.

 

Hard Fork

 

Summary

  1. A hard fork refers to a radical change to the protocols of a blockchain network.
  2. In simple terms, a hard fork splits a single cryptocurrency into two and results in the validation of blocks and transactions that were previously invalid, or vice-versa.
  3. Forks in blockchain include two main groups, accidental and intentional forks; hard forks are part of the latter, along with soft forks.

 

What is Blockchain?

Blockchain refers to a decentralized storage technology that uses a list of records called blocks, which store data publicly and in chronological order. The information is encrypted using cryptography. It ensures that the user’s privacy is not compromised, and data cannot be altered.

A centralized authority does not control information on a blockchain network. Instead, the network’s participants maintain the data, and they hold the democratic authority to approve transactions that happen within the network.

Data within a blockchain is accessible to all users within the network, while any additions to the block always have to be approved by its participants.

 

Forks in Blockchain

Forks in blockchain are defined in various ways, but the general understanding is that they occur when there is a change in protocol when a blockchain diverges into two or more potential paths forward.

Forks can occur in any crypto-technology platform, including Bitcoin. When different parties disagree, alternative chains emerge from the chain, and while most forks are temporary, some end up being permanent.

Short-lived forks result from the difficulty of reaching consensus within the system since, as mentioned earlier, only the users within the network are authorized to approve transactions for changes.

Forks can be split up into accidental and intentional forks. Accidental forks happen when two or more blocks are found at the same time, and it is resolved when subsequent blocks are added, and one of the chains end up being longer than the other. The blockchain network then abandons the blocks that are in the shorter chain, referred to as orphaned blocks.

The second group of blocks, called intentional forks, alter the blockchain rules and includes two different types, including hard forks and soft forks.

 

Forks in a Blockchain

 

Understanding Hard Forks

Hard fork refers to a rule change that comes with wide-ranging implications on the entire protocol of the blockchain network. Compared to the old rules, the valid blocks produced using the new rules may be viewed as invalid, or invalid blocks will be viewed as valid, which means that all nodes meant to work in accordance with the new rules need to upgrade their software.

After the new rule is added, one path follows the new blockchain while the other continues along with the old one. If one group of users (or nodes) uses the old software while the others use the new software, a permanent split can occur.

While this sometimes occurs, in other instances, many nodes using the new software may choose to return to the old rules. However, a more common scenario is that after the new fork is created, those using the old chain realize their version is outdated and less useful than the new one and choose to upgrade to the new one.

 

Hard Forks vs. Soft Forks

The other type of fork stemming from intention forks is soft forks. Hard and soft forks are similar in that when a blockchain rule is changed, the old version remains in the network while the new one is also present.

With soft forks, old nodes might accept data that appears invalid to the new nodes without the user noticing. Nodes in hard forks will stop processing the blocks following the addition of new rules.

The two versions of the software typically remain compatible in soft forks, while that is not the case for hard forks. While both forks create a split, a hard fork creates two blockchains, while a soft fork only results in one.

Almost all users and developers prefer a hard fork over a soft fork due to the differences in security between these types. Overhauling all the blocks within the blockchain requires a large amount of effort and computing power, but the privacy from a hard fork is an important differentiator.

 

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