What is a Hard Fork?

a hard fork is a significant and permanent divergence in the blockchain's protocol, resulting in the creation of two separate and incompatible versions of the cryptocurrency. This divergence occurs when the community, developers, or miners reach a consensus to implement substantial changes to the blockchain's rules, often due to disagreements on key features, scalability, security, or other critical aspects.

Notable hard forks in Bitcoin's history include the contentious Bitcoin Cash (BCH) fork in 2017 and the Bitcoin SV (BSV) fork that followed. These forks were primarily driven by debates over block size limits and different visions for the future of Bitcoin.

During a hard fork, the blockchain is split into two separate chains, each following its own set of rules. Holders of the original cryptocurrency are granted an equal amount of the newly created cryptocurrency on the forked chain. For example, when Bitcoin Cash forked from Bitcoin, Bitcoin holders received an equivalent amount of Bitcoin Cash.

Hard forks can result in a community split, with some users supporting the original chain (often referred to as the legacy chain) and others supporting the new chain. The community's acceptance of the changes determines the success and longevity of the new chain.

Hard forks are distinct from soft forks, which are backward-compatible changes to the protocol. In a soft fork, the upgraded nodes can still interact with non-upgraded nodes, maintaining a single, unified blockchain.

While hard forks can bring about innovation and improvements, they can also lead to community fragmentation, confusion, and contentious debates. The decision to support or reject a hard fork often reflects different philosophies and visions within the cryptocurrency community, emphasizing the decentralized and consensus-driven nature of these digital ecosystems.