What Is a Hard Fork? Understanding Blockchain Splits in Crypto

A “hard fork” in cryptocurrency refers to a major update to a blockchain system that is not backward-compatible with previous versions. In a hard fork, the original coin remains unchanged, while a new coin with upgraded features is created. Examples include Bitcoin Cash (BCH), which was created from a hard fork of Bitcoin, and Ethereum (ETH), which was formed through a hard fork of Ethereum Classic (ETC). In contrast, a “soft fork” is a minor, backward-compatible update that improves or modifies existing functions.

Hard forks are typically decided through votes or consensus among blockchain participants and can also occur due to technical or philosophical disagreements. For instance, Bitcoin Cash was born from debates over Bitcoin’s slow transaction speeds and high fees—supporters proposed increasing block size, which led to the creation of a separate chain. In many cases, holders of the original coin are granted an equivalent amount of the new coin after the fork.

Another notable example is Ethereum’s hard fork in 2016, following the hacking of the DAO project. The fork was carried out to reverse the hack, resulting in the current Ethereum, while the original chain continued as Ethereum Classic. Hard forks serve as a key mechanism for adapting blockchain ecosystems to changing needs or governance shifts.

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