Hard Fork (Blockchain) Definition
A hard fork is a significant change to the protocol of a blockchain network that makes previously invalid blocks and transactions valid, or vice-versa. This requires all nodes or users to upgrade to the latest version of the protocol software. It can be used to add new features to a blockchain or to reverse the effects of hacking or catastrophic bugs. Hard forks can either be planned or contentious, the latter resulting in a split into two separate blockchains.
Hard Fork Key Points
- A hard fork is a radical change to a blockchain’s protocol that makes previously invalid transactions or blocks valid, or vice-versa.
- All nodes must upgrade to the new protocol software to continue participating in the network.
- Hard forks can be used to add new features, correct security risks, or reverse transactions.
- Hard forks can be planned (agreed upon by the community) or contentious (disagreed upon, leading to a blockchain split).
What is a Hard Fork?
A hard fork is a type of protocol upgrade that is not backward compatible. When a blockchain diverges into two potential paths forward — either with regard to a blockchain’s transaction history or a new rule in deciding what makes a transaction valid — this is called a hard fork. It is a radical change that alters the blockchain’s protocol, often to add new features or correct security risks.
Why is a Hard Fork important?
A hard fork is important because it can fundamentally change the way a blockchain operates. It can be used to introduce significant features or changes, such as increasing the block size to allow for more transactions to be processed. Hard forks can also be used to reverse transactions, as was the case with the hard fork to reverse the hack on the Decentralized Autonomous Organization (DAO) on the Ethereum blockchain.
When is a Hard Fork used?
A hard fork is used when a blockchain’s code needs to be significantly changed. This could be to add new features, correct security risks, or reverse transactions. However, because all nodes must upgrade to the new protocol software, hard forks can be disruptive and are therefore not undertaken lightly.
Who can initiate a Hard Fork?
Typically, the developers of a blockchain protocol initiate a hard fork. However, if there is disagreement within the community about the proposed changes, a group can choose to initiate a hard fork and create a new version of the blockchain. This was the case with Bitcoin Cash, which was created by a hard fork of the Bitcoin blockchain.
How does a Hard Fork work?
When a hard fork is implemented, all the nodes on the network are required to update to the new software rules. If some nodes decide not to update their software, they will no longer be compatible with the new rules and will be separated from the network. This can result in the creation of a new blockchain, as was the case with Ethereum and Ethereum Classic.
