Home Education Understanding the Concept of Hard Fork

Understanding the Concept of Hard Fork

There are many technical terms associated with the world of cryptocurrency and blockchain technology. A hard fork is one of the prominent terms that is often used by experts and crypto developers and the term is quite interesting in its logic and usability. To understand what a hard fork is, we must know what a fork stands for.

Fork and Hard Fork

A fork can be defined as an event in the world of cryptocurrency that goes on to split the protocol followed by the existing software into two different co-existing versions. These forks are often planned by developers, but some of the forks may also happen accidentally. The good thing is that most of the time, these forks do not have any destabilizing effect on the blockchain network. The requirement of forks arises when the developer wants to add some new features to the existing blockchain to make it more user-friendly or advanced in operating procedures.

A hard fork can be defined as an event when a cryptocurrency splits into two different parts. The developers change the existing codes of the cryptocurrency, which essentially results in two versions of the coin – new version and old version. While in the soft fork, the emphasis is to make two versions of the coin compatible, the hard fork does just the opposite thing. The hard fork makes the two existing versions of the software incompatible to each other.

Real-World Examples

Take, for instance, Bitcoin Cash, which is a hard fork of the Bitcoin. Bitcoin Cash was created as a result of a hard fork after which two different assets – Bitcoin and Bitcoin Cash – came into existence. These two have their own value and are totally different right from their activation blocks to asset values. This essentially means that one cannot send Bitcoin Cash on the blockchain of Bitcoin and vice-versa. This is because the blockchain-related to Bitcoin Cash and Bitcoin are completely different as developers have added different codes in both of the blockchains to make them incompatible to each other, the event which is termed as a hard fork.

It is also important to notice that not every hard fork result in a new digital asset or a coin. Some hard forks are meant only to make software incompatible. For example, the hard fork of ethereum known by the name Byzantium has been created to make software incompatible rather than creating a new version of ethereum coin. Byzantium came as an essential upgrade for the software and once it is installed, the older versions of the blockchain became incompatible to the digital asset. But note that even after Byzantium, only ethereum is in existence as a digital asset which contrasts sharply to the case of Bitcoin where hard fork resulted in two digital assets – Bitcoin Cash and Bitcoin. In sum, a hard fork is related to the software and ultimately, it boils down to the codes used by the developer that define the direction and result of the hard fork.

Robert Hill
Robert Hill
Robert a Crypto writer and an expert in delivering content with both informative and entertaining approaches. He has 4 years of experience working as a crypto writer with our team. You can interact with him by email: robert@forexnews.world.

Must Read

Rupee Surges Against American Dollar and crosses 75-Mark

Since March 2020, the Indian rupee was around 74.59 against the American Dollars, but today it has surged by 42 paise and cross the...

USD Stable Against Major Global Currencies

With the yen, yuan, and euro struggling to recover from the adverse economic impact of the ongoing global pandemic situation, the US dollar continues...

The Brilliant Come Back of FOREX-Safe-haven Currencies During the Pandemic

FOREX-safe haven currencies made a brilliant come back on Tuesday after a long time just because of the positive predictions about the stock values,...

Singapore Exchange to Own FX Trading Platform With $128M

The Singapore Exchange (SGX) made headlines over the stock market with their declaration of buying the stake of 80 percent, which does not belong...

Dollar and Euro stay firm amid Corona Pandemic

Overview COVID 19 is taking a toll on the EUR/USD pair. On that note, today, the currency pair is struggling to recover itself. The last...