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Blockchain Hard forks Explained: What Are They And How Do They Work

Blockchain is a series of substantiated and sequential ordered cryptocurrency transactions organised into blocks. These blocks then added by a process which referred to as mining. The transactions of one blockchain can be related to one specific cryptocurrency or token.

Each of these has its own particular set of rules which dictate how operations can be verified, how many can test in every block, and so on. These rules must follow if you would like to mine a particular coin or blocks there to the blockchain.

If someone does not as these rules imposed, one has full freedom to change them, and as a result of this, they “fork” the existing blockchain. Making hard fork, results in creating a new blockchain, which consists of new rules which are not compatible with older versions. This results in the formation of an entirely new cryptocurrency.

One might think of the opinion that cryptocurrency requires bigger blocks which try in lowering the transaction fees. Arguably, one can take the code base of the original blockchain, then update it to allow for larger blocks and roll out the update to fork the blockchain.

Subsequently, the decision is then in the community as to which blockchain to support: the old one, or the newly “forked” one, or both.

This is exactly the scenario with Bitcoin in August 2017 when a group of developers decided to want bigger blocks after transaction fees for the original Bitcoin were getting out of hand. So a new protocol was created resulting in the formation of a new blockchain and with it a new cryptocurrency, Bitcoin Cash.

Every hard fork comes with its gradation and intricacies. A very concrete principle explains the question of what a hard fork is and what purpose it serves is explained by a very concrete principle.

Apart from Hard forks, there is another term which goes by the name of soft forks. Soft forks operate on the same premises as hard forks with a critical difference that sets each other apart. The resulting software in a soft fork is backwards compatible with older versions. Additionally, there is no new cryptocurrency created, and business usually runs.