What are Soft Forks & Hard Forks?

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If you are not familiar with what goes on under the hood of the blockchain, don’t be alarmed when we talk about forks. It has nothing to do with cutlery or fork-lift, for that matter. Fork is an esoteric cryptocurrency term that refers to any change to the protocol of blockchain.

For those who have fussy computer science background, the protocol we are talking about here is a series of rules that regulate/govern how the blockchain works or operates. So, how do all these concepts pan out in the world of cryptocurrency?

A fork can be taken as either a permanent or temporary alteration to the blockchain’s current version. This is much like a fork in our roads. With that said, there are two types of forks: soft fork and hard fork. Either way, these forks have to be initiated by cryptocurrency miners themselves, and with the decentralized nature of blockchain, a lot of consensuses has to be reached before any change is confirmed and implemented.

What Is a Hard Fork?

A hard fork is a terminology that’s used to describe a permanent change to the protocol of a blockchain, which often invalidates transactions and blocks that were previously invalid. The reserve is also true. This major change requires that all computers (or nodes) on the blockchain network have to upgrade to the latest protocol software in order to use the new blockchain/coin. If they choose to stick with the existing protocol, the nodes will have to use the old blockchain or crypto coin.

In other words, a hard fork leads to a permanent divergence in the blockchain network when a change (or a slew of changes) made are not compatible with the existing protocol of the network. As a consequence, this creates an entirely new chain that forks off from the old one. The new version comes with its own set of rules, though.

Of more importance is that for a hard fork to be activated, all miners involved on the network must agree on the new set of rules. More than that, the changes are not backward compatible. That means miners who are interested in using the new blockchain or coin must make sure that their computers (or nodes) are upgraded accordingly.

What Are Hard Forks Used For?

A hard fork is often utilized to make overhaul changes to the protocol of a blockchain network. The best way to understand the implication and use of hard forks is to look at major examples that occur in the Bitcoin network — these include Bitcoin Gold and Bitcoin Cash.

What’s a Soft Fork?

A soft fork is a blockchain term that refers to a mild change in software protocol in which only previously valid transactions and blocks are made invalid. It’s an upcoming change that will not conflict with the existing version of the blockchain network. A soft fork is backward compatible because old computers/nodes will recognize new blocks as valid.

The characteristic aspect of soft forks is that they require only a majority, not necessarily all of, the miners to agree to enforce the new protocol. Unlike a hard fork, a soft fork entails an upgrade for computers in the blockchain network (nodes) that is not a must or compulsory.

While old nodes will “see” the current version of the network, if they continue to mine blocks, the new nodes might reject them. There’s yet another reason to upgrade your node to match up to the new set of rules. That is, the more people update their nodes, the better the integrity and the more secure the network after the fork.

What are Soft Forks for?

They help fix minor problems with the network

A soft fork can be used to make changes to the transaction format or tweak a few things to fix pre-existing issues with the network.

Add new features

The decentralized nature of blockchain networks makes upgrades quite difficult. That’s where a soft fork can come in handy. It enables miners to add new transaction types to the current network.

SegWit: a Great Example of a Soft Fork

The most recent example of a soft fork is Segregated Witness Fork (popularly called SegWit). This soft fork was deployed to help fix the issue with the block size which was only limited to 1MB. It quite pained miners because as more and more people embrace Bitcoin, there are a huge backlog and transaction snarl-up. This lead to increased wait time. SegWit allows for more transactions to be processed and stored per block.

 

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