What is a hard fork?

Hard fork (from English. a hard fork is a change in the rules of the blockchain that invalidates all transactions made after this change. This can split the network into two separate chains: the old chain and the new chain.

To understand how a hard fork works, imagine a road with two directions of traffic. If there is an accident or repair on this road, traffic on it stops, and drivers have to look for alternative routes. In the case of a blockchain, when a hard fork occurs, the old chain continues to work according to the old rules, and the new chain begins to function according to the new rules.

Examples of hard forks

One of the most famous examples of a hard fork is the separation of Bitcoin Cash (BCH) from Bitcoin (BTC). In August 2017, the Bitcoin developer community decided to make changes to the blockchain protocol to improve scalability and transaction speed. However, not all members of the network agreed with these changes. As a result, a hard fork occurred, and a new coin appeared — Bitcoin Cash.

Another example is Ethereum Classic (ETC), which split from Ethereum (ETH) after The DAO hack in 2016. The developers of Ethereum decided to return the funds stolen as a result of hacking, by creating a new chain of blocks and canceling some transactions. Part of the community did not agree with this decision, and as a result, Ethereum Classic was created.

It is important to note that hard forks can be either planned or unplanned. Scheduled hard forks usually occur after changes are discussed and approved by the developer community. Unplanned forks can occur as a result of technical problems or cyber attacks.

In conclusion, a hard fork is a complex process that can have serious consequences for the entire blockchain ecosystem. It can cause network separation, loss of funds, and other problems. Therefore, it is important to understand how hard forks work and make informed decisions when they occur.