Every cryptocurrency undergoes major changes at some point, often through hard forks and soft forks. These updates to the protocol make significant adjustments to how the system operates.
In this article, we will explore the concepts of hard fork and soft fork in blockchain, their importance, and most importantly, how they differ from each other.
Table of Contents
What is a hard fork in blockchain?
A hard fork in blockchain is a significant change to the protocol of a blockchain network. It requires all nodes in the network to agree to a software upgrade.
If a hard fork is contentious, it can lead to a chain split, where both the legacy blockchain and the upgraded blockchain coexist. An example of this was the split between Bitcoin (BTC) and Bitcoin Cash (BCH) in August 2017.
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What is a soft fork in blockchain?
A soft fork in blockchain is a protocol change that is backward-compatible with the previous version. It does not require all users to upgrade to the new protocol.
Soft forks can introduce new features or reverse transactions. In a proof of work system, when a majority of miners upgrade to the new software, the soft fork ends, and the blockchain returns to a single chain.
Hard fork vs. soft fork in blockchain: key difference
Hard forks and soft forks update a blockchain differently. A hard fork creates a permanent split, while a soft fork is backward-compatible and less disruptive.
Hard forks bring fundamental changes that require everyone to adapt, while soft forks are smaller tweaks for improvement without causing a split.
Why do forks happen in blockchain?
Forks can occur due to planned network upgrades, community disagreements, nullifying events, or creating new coins.
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Examples of hard forks and soft forks
An example of a hard fork is the creation of Bitcoin Cash (BCH), aiming to increase block size for scalability.
An example of a soft fork is the SegWit update in Bitcoin to address transaction malleability and scalability.
Benefits and challenges of hard forks and soft forks
Forks can bring attention and investment to a project, resolving issues by giving the community a fresh start. However, they can also pose risks if not executed properly.