Hard Fork

A blockchain hard fork is a significant change or upgrade to a blockchain’s protocol that is not backward-compatible with the previous version. This means that nodes (computers in the network) running the old version of the software will no longer be able to participate in the new blockchain, leading to a permanent split between the two versions of the blockchain.

A hard fork occurs when developers introduce a fundamental change to the blockchain’s rules or protocol, such that it creates an entirely new version of the blockchain. This could include changes in block size, transaction validation rules, or consensus algorithms.

After a hard fork, the old blockchain and the new blockchain are incompatible with each other, and nodes running the old version cannot recognise the new version (and vice versa). As a result, the blockchain permanently splits, with two distinct versions operating independently.

These parallel blockchains share the same history up until the point of the fork but diverge after the split, each with its own history, data, and transaction rules, as well as community, miners/validators, developers, and use cases. Hard forks often resolve ideological disputes (e.g., scaling approaches) or security crises, as opposed to soft forks, which are backward-compatible upgrades.

Additionally, when a blockchain undergoes a hard fork, it can result in the creation of a new cryptocurrency. Notable examples include Bitcoin Cash (BCH), which increased Bitcoin’s block size to 32 MB, and Ethereum Classic (ETC), which preserved the original chain after Ethereum reversed a $60 million hack in 2016.