From the LBank blog.
Every technological product needs constant developments to improve the efficiency of its functions. Many developers clean and fix bugs and frequently release updates to their programs for users to have improved functionality and maintain access to their services.
When it comes to blockchain technology, the concept of upgrading a network is quite different. Although you don’t have to understand every line of code that makes up a blockchain like Bitcoins, the option to do so is crucial. This is because blockchain is decentralized, and there is no central body in the blockchain world, making it impossible to alter the network at will. Thus, adding new features to blockchain networks can be a complex task.
This article will explore how blockchain networks are upgraded — hard forks and soft forks, and how they work.
Typically, a blockchain fork occurs whenever a community changes a blockchain protocol or underlying set of rules. A separate blockchain is then created, sharing the same features and rules as the main blockchain.
Forks in blockchain technology can be considered an evolution of the network. They allow the network to adapt and change to meet the evolving needs of its users and the wider market. This is a stark disparity to traditional financial systems, where a central authority typically dictates updates.
Forks can happen due to several reasons, including differences in opinion about the direction the blockchain should take, changes in the network’s consensus protocol, or simply as a result of a bug in the blockchain’s software.
Forks can be either soft or hard, with the main difference being the level of disruption caused by the split. A soft fork occurs when a new version of the blockchain software is introduced that is backwards compatible with the older version. In contrast, a hard fork is a more disruptive event, as it creates a completely new version of the blockchain that is incompatible with the older version.
Blockchain forks are a critical aspect of the technology, as they represent a change in the underlying structure of the network. They are initiated for a variety of reasons, including differences in opinion, changes in consensus protocols, or bugs in the software.
Understanding the different types of forks and their potential impact is crucial for anyone looking to invest in or use blockchain technology.
A hard fork is a major change to the rules of a blockchain network that is not backwards-incompatible with the previous version of the software. This means that once the hard fork is implemented, all participants in the network must upgrade to the new version of the software to continue participating and validating transactions on the network.
Hard forks are used to introduce major changes to the network, such as changes to the consensus algorithm, new features, or the reversal of transactions in case of a security breach or hack. The hard fork splits the existing blockchain into two separate chains, with the new chain adhering to the updated rules while the original chain continues to follow the old rules.
One of the widely-known examples of a hard fork in the blockchain world is the split between Ethereum and Ethereum Classic. This occurred in 2016 due to the infamous DAO hack. A vulnerability in the decentralized autonomous organization (DAO) code was exploited, leading to the loss of a significant amount of Ether.
To prevent the loss of funds, the Ethereum community decided to hard fork the blockchain to reverse the hack and return the stolen funds to their rightful owners. This split the Ethereum community into two, with some supporting the hard fork and others opposing it, leading to the creation of the Ethereum Classic.
Simply put, a soft fork is a modification to the rules of a blockchain network that is backwards-compatible with the previous version of the software. This means that users running the older software version can still participate in the network and validate transactions, but they may have reduced functionality.
Soft forks are introduced when minor changes are to be implemented to the network, such as updating the network’s transaction validation rules or fixing security vulnerabilities. Unlike a hard fork, a soft fork does not split the existing blockchain into two separate chains. Instead, it allows for a gradual transition to the updated rules as more and more users adopt the new software.
A hard fork is a more disruptive event, as it creates a completely new version of the blockchain that is incompatible with the older version. Meaning, users running the older version of the software will no longer be able to participate in the new network and will need to upgrade to the newer version.
They provide an opportunity for the network to evolve and adapt to changing circumstances, but on the other hand, they can lead to a loss of trust and a decline in the value of the network if not executed properly.
Soft forks are generally considered to be less disruptive than hard forks, as they allow for a smoother transition to the updated rules without requiring all participants in the network to upgrade their software. This can help to minimize confusion and uncertainty and reduce the risk of a decline in the value of the network.
However, it’s important to note that soft forks can still have consequences for the network and its users. For example, if not enough users adopt the new software, the network may become vulnerable to attacks or may experience reduced performance.
Generally, Forks are a way to make new upgrades in our networks. In short, the chain of blockchain splits when forks are created. Both hard and soft forks allow the blockchain network to adapt to changing circumstances, and it’s important to note that forks can also cause uncertainty leading to a loss of trust in the network and a decline in its value.
So it’s important to do your research and understand each blockchain fork’s concept.
Disclaimer: The opinions expressed in this blog are solely those of the writer and not of this platform.
This article came directly from the LBank blog, found on https://lbank-exchange.medium.com/soft-fork-vs-hard-fork-detailed-guide-for-beginners-198072d7e5e4?source=rss-87c24ae35186——2