What are blockchain hard forks and soft forks?

Introduction to blockchain forks

In the context of blockchain ledgers, a fork refers to the process of implementing a new upgrade to a blockchain network. 

As blockchain projects evolve, developers regularly update their underlying protocols to support new software upgrades or patch outdated functionality.

Depending on the type of upgrade that is being implemented, it may or may not be backwards compatible with the original chain. In some instances, new software updates do not directly affect how the protocol operates and developers can implement them without causing disruption to the network. These are known as soft forks.

Meanwhile, some upgrades are complex and may introduce entirely new features that are not backwards compatible with the older code. Activating these particular changes requires more effort and can sometimes be very disruptive for the network. These are known as hard forks.

Understanding different types of blockchain forks can be an important step to grasping the full potential of blockchain technology. So let’s get started.

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Types of blockchain forks


There are two main types of blockchain forks: 

  • A soft fork: a backward-compatible update to the protocol rules that does not create two separate chains. It allows for a seamless transition as all nodes on the network can continue to validate transactions and blocks, maintaining consensus even if some participants choose not to upgrade their software.
  • A hard fork: a significant and irreversible divergence in the blockchain's protocol rules, resulting in two separate and incompatible chains. This typically occurs when a substantial change is made to the blockchain's code, often leading to the creation of a new cryptocurrency and community.

What is a soft fork?


A soft fork occurs when developers make a backward-compatible upgrade to a blockchain protocol.

After a soft fork, nodes that may not have upgraded to the newest version of the protocol can still operate on the blockchain network without disruption. Transactions and blocks conforming to the new rules are valid and compatible with blocks that were confirmed before the soft fork as well as new blocks that are created after the soft fork.

Soft forks are typically used to implement minor changes, such as bug fixes or optimizations. This is because soft forks can be executed without causing a complete chain split.

What is a hard fork?


A hard fork is a non-backwards compatible change to a blockchain protocol.

Hard forks result in significant and irreversible changes to the blockchain protocol, that make the new version of the blockchain no longer in sync with the previous version.

Developers activate this type of fork when a major network upgrade introduces new blockchain rules that are incompatible with the old protocol.

Hard forks result in the network spliting into two separate blockchains, one following the old protocol and the other adhering to the new one.

Each branch that results from a hard fork operates independently. This means that after a hard fork, network nodes accept transactions as valid on one branch of the fork, but do not maintain the other fork that results from the split.

Hard forks often occur when there is a need to make substantial changes to the network, such as introducing new features, improving security, or resolving vulnerabilities. Network nodes and developers must upgrade their software to the new fork version in order to continue participating in the network.

Why are forks important?


Developers and communities of nodes have historically implemented hard forks to resolve internal disputes among important community members. In many instances, tensions among teams regarding new features, important decisions, or future directions have erupted into heated public battles.

These often culminated in one side hard-forking the blockchain to create an entirely new spin-off version, with its own unique cryptocurrency. It's then up to miners, nodes, and other members of the broader community to decide which forked network they wish to use moving forward.

However, many other blockchains conduct soft forks on a more regular basis in order to adopt new functionality or make less impactful updates to the blockchain protocol itself. 

While hard forks may often appear as the result of disagreements within the community, soft forks are more typically the result of the community mutually agreeing that an update needs to take place in order to maintain the network.

Historical examples of important hard forks


Ethereum and Ethereum Classic

In 2016, the Ethereum network underwent a hard fork to roll back the famous DAO hack, which involved hackers stealing millions of dollars worth of Ether (ETH).

However, a part of the community disagreed with this approach. Instead, they continued to support the original blockchain, leading to the creation of Ethereum Classic (ETC). 

Check out our Ethereum vs. Ethereum Classic comparison page for more details on this hard fork and the differences between these blockchains.

ethEthereum Price

$3,443.16
24H
Change
-1.29%
High
3,491
Low
3,378

Bitcoin and Bitcoin Cash 

In 2017, a contentious hard fork occurred in the Bitcoin network, leading to the creation of Bitcoin Cash.

Disagreements over the block size limit drove the split. Bitcoin Cash wanted to increase block size to improve scalability and transaction speed. However, many in the community felt these improvements would come at the expense of decentralization and security.

Years later, this time of division within in the Bitcoin community is commonly referred to as "the Blocksize wars."

Check out our Bitcoin vs. Bitcoin Cash comparison page for more details on this hard fork and the differences between these blockchains.

btcBitcoin Price

$64,611.00
24H
Change
-1.00%
High
65,383
Low
63,900

Litecoin and Bitcoin 

In 2011, Massachusetts Institute of Technology graduate and Google computer scientist Charlie Lee hard forked the Bitcoin protocol to create Litecoin.

With Litecoin, Lee aimed to develop a blockchain that could finalize transactions faster and be used to pioneer new features before they go live on Bitcoin. ​​Litecoin has often been referred to as “silver to Bitcoin’s gold.” 

Check out our Litecoin vs. Bitcoin comparison page for more details on this hard fork and the differences between these blockchains.

ltcLitecoin Price

$72.11
24H
Change
-0.99%
High
73
Low
71

Summary of blockchain forks


These two types of forks are essential mechanisms in the blockchain space that facilitate innovation, security enhancements, and scalability improvements. 

While hard forks lead to the creation of new chains with divergent protocols, soft forks introduce backward-compatible changes. 

These forks have played a pivotal role in shaping the blockchain landscape, enabling networks to adapt and evolve in response to technological and community-driven changes.

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