Hard Forks

If you're familiar with cryptocurrencies, you've probably heard of hard forks. But what are they, and how important are they? Why they're important to the blockchain?

Hard Fork

A hard fork effectively breaks a blockchain into two, with a shift in the blockchain's code resulting in two versions.

A hard fork breaks the blockchain into two versions that are incompatible with each other. This means that nodes running the new blockchain version would not accept transactions made on the old blockchain version, and vice versa. For the hard fork to take place, all nodes on the blockchain must agree to the move.

Hard Forks: why it happens

Hard forks, on the other hand, may be used as part of a marketing strategy to draw attention to a new cryptocurrency. For example, anyone who owned Bitcoin in October 2017 was eligible for an airdrop of the same amount of Bitcoin Gold.

A publicity stunt in which tokens or coins are sent to blockchain wallets is known as an airdrop. It is most usually performed... This was to commemorate the hard fork of Bitcoin Gold.

Other Reasons

Aside from the reasons listed above, hard forks can happen for a variety of reasons.

Another justification for a hard fork is to compensate users in the event of a security failure or attack on a blockchain network. In this case, attackers' transactions dating back to a specific date are no longer accurate. This happens because, after a hack, developers typically patch newly exploited vulnerabilities quickly.

The flaw in the DAO project's code was the reason for Ethereum Classic's hard fork, which we'll go through in depth later.

Various coders from all over the world contribute to the improvement of a common protocol like Bitcoin by proposing unique updates. In the case of Bitcoin, there are a slew of BIPs to choose from (Bitcoin Improvement Proposals). There is a list of EIPs for Ethereum (Ethereum Improvement Proposals).

Hard Fork versus Soft Fork

A soft fork is a blockchain software update that is backwards compatible with previous versions. This ensures that miners who haven't updated to the latest version of the programme can still participate in transaction validation and verification.

A soft fork is much simpler to enforce than a hard fork since only the majority of miners would need to update.

However, a miner who hasn't updated yet will be affected by the soft fork regardless.

Assume you're a non-upgraded miner who produces a 1 megabyte block. Incoming transactions can also be validated. However, the update only allows for the addition of 8 megabyte blocks to the ecosystem, so you won't be able to add yours – sorry.

With that in mind, soft forks can be thought of as an opportunity for miners to update their software or risk having their functionality hampered.

Conclusion

In essence, a hard fork is a significant shift to the blockchain that necessitates the migration of all nodes in the distributed network to the newer edition (that supports readjusted functionality).

A soft fork, on the other hand, is a software update that is backwards compatible with previous blockchain versions. This ensures that miners who haven't updated to the latest version of the programme can still participate in transaction validation and verification (although they are incentivized to upgrade).

In the context of network growth, hard forks and soft forks are relevant. Despite the lack of centralised governance, they allow the group to make sufficient improvements and upgrades.

Hard forks allow blockchains and cryptocurrencies to add new features and enhancements as they mature. Without them, the environment would have needed a centralised server to keep track of anything going on in the network. Fortunately, we won't be forced to use centralised servers, but we will be forced to use hard forks.