What is hard fork and soft fork?

What is Hard Fork?

Knowledge of what a hard fork is is necessary for users in contact with the world of cryptocurrency. Consider how the forks pass, what their strengths, weaknesses are and how to benefit. A hard fork cryptocurrency is the introduction of significant changes to the chain program program, as a result of a new branch network was created to operate by its own rules and does not interact with the "parent" system. In this review, we will consider in detail the main points about hard forks, and we will understand why they are performed.

As mentioned above, the hard fork cryptocurrency is a modification of the source code of the blockchain, as a result of which new rules for the functioning of the system are created, incompatible with the old algorithms. Since the old and new rules cannot work within the same chain, the network is ramified (hence the name of the process, since the hard fork translates as “hard fork”). The “mother” system continues to operate according to established algorithms, while the new blockchain has its own ecosystem.

In most cases, the result of the hard fork is the creation of a new cryptocurrency, which runs within the same payment system. Sometimes this operation does not imply the creation of a new asset. Changes were made properly, for example, to correct the principle of obtaining a coin. In this case, the split occurs. The best example of hard forks is Bitcoin Cash. For a long time, the BTC blockchain worked, satisfying user needs, and everyone was happy. In 2017, there was a proposal to change the settings and increase the block size to 8 MB. The step is to solve cryptocurrency scalability problems: reduce transaction costs and increase the number of transactions per second.

What changes were made during the hard fork?

We have learned that often because of hard forks a new cryptocurrency will appear. This asset was formed due to the fact that the organizers made major changes to the original blockchain, which was incompatible with the previous algorithms. As a rule, the following aspects are touched when holding a hard fork:

Sets the maximum issue of new currency.

Generation blocking time is prescribed.

Sets the reward amount for the disclosure of the block and the frequency of its adjustment.

An algorithm that controls the complexity of mining was created.

Block size is set (possibilities of subsequent modification of this parameter are added in addition).

To be fair, we notice that hard fork fixers rarely get carried away with drastic changes that are really all. As a rule, they only cover a few aspects. For example, one of the most successful forks of Bitcoin Cash is in many ways similar to the original Bitcoin. It has the same release (21 million coins), approximately the same block time.

Conclusion

Considering all of the above, we can say that despite some shortcomings, the hard fork cryptocurrency is a rather positive development. Of course, it is often used by attackers, and ordinary people are burning on unsuccessful projects. However, dramatic changes in blockchain networks are stimulating their development, expanding application possibilities, making payment systems as user friendly, and providing new investment opportunities. The main thing is to observe a competent approach when working with one or another hard fork to reduce all risks

Hard Fork vs. Soft Fork

If you are a good fan of cryptocurrency, you will probably find the terms hard fork versus soft fork. Blockchains, which is the technology that underlies cryptocurrencies, is a distributed ledger made up of ever-growing data blocks to form a chain of blocks. Since cryptocurrencies are generally decentralized, participants must agree on a set of rules for validating transactions to reach consensus.

A fork occurs in instances when the blockchains are split in two due to a split in the agreement or a change in the essential rules of a protocol. The appearance of forks due to a split in the consensus often occurs when miners stumble across a block simultaneously resulting in two split chains.If a split occurs due to a change in protocol rules , it symbolizes a modification of the basic codes of the developers. Such divisions are permanent.

What are the Differences between Hard Fork vs Soft Fork?

A hard fork represents a permanent difference to a blockchain. It usually occurs when non-upgraded nodes fail to validate the code created by an upgraded node, which often follows newer consensus rules. On the other hand, a soft fork is a non-short blockchain difference and often occurs when non-upgraded nodes do not comply with consensus rules.

Soft Forks

Repetitive forks are repeatedly compatible ways of upgrading blockchains. In other words, a soft fork can be a software upgrade, which is back-compatible with older versions of the software. A soft fork does not require any nodes within the network to upgrade or maintain consensus. This is because all the blocks found within the soft glue blockchain follow the same a previous set of consensus rules in addition to the new ones.

When a soft fork occurs, the blocks formed by the nodes and adhering to an older set of consensus rules tend to violate the newer set of consensus rules. These blocks are probably useless by most mining upgrades. For a soft fork to work, most miners within the network should not only recognize the newer set of consensus rules but also implement it. Once most are reached, the old network is useless.

Hard Forks

Unlike soft forks, hard forks are characterized by a permanent change from earlier versions of blockchains. As a result, a new set of policies that are incompatible with the previous network was introduced. A hard fork can be described as a software upgrade, which is incompatible with older versions of the software. Therefore, all network participants should upgrade to newer versions of the software so that they can maintain validation and validation of all new blocks of transactions.

Conclusion

Because blockchain technology is characterized by decentralization, participants must always reach a consensus when it comes to the state of their blockchain. If you are a cryptocurrency enthusiast and you want to invest, you should know about hard forks vs soft forks because it will help you find your way around.