A hard fork is a permanent change from the previous version of the blockchain. Nodes running on earlier versions are no longer accepted by the latest version. This essentially creates a fork in the blockchain, meaning there are now separate branches or chains.
A hard fork can be implemented to fix important security vulnerabilities found in older versions of the software, add new features, or reverse transactions. This requires the nodes supporting the network to be upgraded to support the new blockchain.
Most notable hard forks
The Ethereum hard fork was implemented due to "the DAO" hack in 2016. The DAO was a decentralized form of investment fund that ran on the Ethereum blockchain. A hard fork of the Ethereum blockchain was introduced to circumvent the hack, which resulted in the Ethereum now being split into Ethereum and Ethereum Classic (the original version).
Another prominent example of a hard fork is the split from Bitcoin (BTC) that led to the introduction of Bitcoin Cash (BCH) in 2017. Some believed that the classic Bitcoin, with its 1 MB block size, was too cumbersome in practical use as its small block size slowed down the processing of new transactions and caused temporarily high processing fees. Bitcoin Cash emerged from a modification of the Bitcoin blockchain code, specifically designed to allow faster and more cost-effective transactions through larger blocks.
Main features of a hard fork
- Network improvement
Hard forks can be implemented to improve the performance, security or scalability of the blockchain network. - Irreversible
Once a hard fork has occurred, there is no way to reverse it. The two chains will continue to exist independently. - Mandatory upgrade
Participants in the network must upgrade their software to the new version to remain compatible.
