With open-source cryptocurrency, implementing changes and updates can be troublesome. Hard Forks and Soft Forks are two different methods used to upgrade or change a cryptocurrency network.
A fork occurs when a project’s software is copied and modified. The original project continues to exist, but it is separate from the new one which adopts a different path. Imagine a fork in a road leading to a new direction.
In this Guide, we’ll take a closer look at Hard Forks and how they work.
HARD FORKS vs SOFT FORKS
In contrast, a soft fork is a backward-compatible upgrade which means the network’s nodes can still communicate with one another.
How do hard forks work?
Simply put, a hard fork refers to when a crypto project is split in two.
A hard fork occurs when software is copied and one version altered. The original project stays the same but is separate from the second, (the new one) which adopts a different direction. The two versions of the project are now incompatible, as hard forks are backwards-incompatible updates. The procedure of creating a hard fork is permanent and cannot be reversed.
A hard fork can be used to validate previously invalid blocks or transactions on the blockchain. The reverse is also possible, so certain blocks may become invalid. Nodes may also add new rules that are incompatible with the rules of old nodes. New nodes can only interact with other nodes operating on the new version.
Now, these two projects run parallel. After the fork, they will no longer work on the same blockchain, and they’ll have different transactions and blocks.
Due to their shared history, if you held tokens before the fork, you’ll end up with tokens on both networks.
Hard forks may occur when issues arise related to a project’s security or scalability. They may also be created to add new features that weren’t present in the original version of the project.
A hard fork may aim to create a better, more efficient version of the original project if this cannot be achieved through a simple software update.
DISCLAIMER:Not financial or investment advice.