Crypto Basics: What Are Hard Fork & Soft Fork? - Kakiforex.com - Financial Market Media No. 1 in the World Crypto Basics: What Are Hard Fork & Soft Fork? Crypto Basics: What Are Hard Fork & Soft Fork?

March 27, 2021

Crypto Basics: What Are Hard Fork & Soft Fork?

 Lots of very crypto projects involving hard forks lately. This time we will summarize a little about the hard fork, including the soft fork so that the reader does not wonder what it really means.


Fork software occurs when software is copied (copied) and composed (modified). This means, the original project will continue only to have parted ways with the latest, making it different from the previous one.


It happens often for most open-source projects and has actually happened long before the existence of Bitcoin and Ethereum.


What is the difference between a hard fork and a soft fork?


HARD FORK


It occurs when a new version of the blockchain node no longer accepts the previous version of the blockchain, which creates a permanent difference from the previous version of the blockchain. This means, the new node only communicates with others operating the new version.


Because of that, the blockchain is divided into two different networks: the first with the old rules and the second with the new rules.


The two networks continue to generate blocks and execute transactions but not on the same blockchain.


The closest example, the hard fork that took place in 2017 saw Bitcoin ‘broken’ into two different networks. The original, Bitcoin (BTC) and the latest, Bitcoin Cash (BCH).



Bitcoin Cash was created to increase the size of the block while Bitcoin disagreed with the proposal as it required changes in legislation.


Among other examples is the separation of Ethereum and Ethereum Classic.


SOFT FORK


It is a change to the software protocol where only valid block transactions are made invalid. Or more simply known as backward-compatible updates, in which nodes that have been updated can still communicate with those that have not been updated.


If the hard fork conflicts with two different rules, the soft fork does not conflict with the previous rule.


For example, the Segregated Witness (SegWit) fork that occurs after the separation of Bitcoin with Bitcoin Cash.


SeigWit is an update that changes the format of blocks and transactions. The old node can still validate blocks and transactions but cannot read them.


Only a few things can be read when nodes are converted to new software, allowing them to read additional information.


 


Basically, these two forks are used for different purposes. While hard forks are likely to separate communities, soft forks are seen as more friendly i.e. compatible for both networks.


Anyway, both are very important to ensure the success of blockchain networks for a long time. It creates opportunities for blockchains and cryptocurrencies for integration with new features as they are developed.