Forking is used in both Cryptocurrency as well as Blockchain technology. There are two types of forks: Hard Fork and Soft Fork. Forking refers to the process of dividing a Blockchain into two new paths. Usually, a Hard Fork or a Soft Fork is introduced in the system when the security of the network is at risk.
What does a Hard Fork mean?
The function of a Hard Fork is to divide the blockchain network into two branches. One of the branches will follow the old protocol, whereas a new one will follow a new protocol. Forking takes place only when there arises an urgent need to change protocols in the blockchain network. As soon as a Hard Fork is used, the users willing to follow the new protocol will have to update the protocol software.
Blockchain developers and Cryptocurrency users can use Hard Forks if they deem fit. A Hard Fork is introduced in the process when a consensus is reached regarding the fact that new rules have to be incorporated in the system. This happens at a time when a breach is detected in the network. Hard Fork is also used when the users of a certain Cryptocurrency platform grow tired of the same old functionalities. They try to introduce changes beneficial to them.
A Hard Fork creates a divergence from the previously existing blockchain. The users require updates of the software for carrying on transactions. The blocks are divided into two branches. The users with updated versions get to use the new path formed using the Hard Fork. The ones who do not update continue with the previous protocol for some time before it stops working completely. Then it becomes a compulsion to get the software updated.
What is the difference between a Hard Fork and a Soft Fork?
There is not much difference between a Hard Fork and a Soft Fork. Both the forks create a divergence in the existing block, and serve similar purposes. However, the Hard Fork does not deem the previous path invalid, which is the case in Soft Fork. The Soft Fork does not allow the users to use the old path. It renders them invalid. No transaction takes place along that path.
Even though a greater computing power is required for the introduction of a Hard Fork, all developers choose Hard Fork instead of Soft Fork. A Hard Fork works more efficiently in case of a security breach. It covers all grounds for the users, and makes the functioning of the system as smooth as possible.
What are Hard Forks used for?
An exemplary use of Hard Fork was seen when the Decentralized Autonomous Organization (DOA) was hacked. A Hard Fork is used to make remedies in a faulty security system, to strengthen the same system, or to reverse transactions which may have happened due to the activities of hackers.
People who invest in cryptocurrencies like Bitcoin or Ethereum will be well-versed with these. It is a very safe time to invest in cryptocurrencies, given that technology has progressed to such an extent that hacks are being reversed and users are getting their currencies back after they have been looted. Platforms for bitcoin and blockchain that provide beginners with an overall idea of the workings of the cryptocurrencies.
When a hack like the one at DOA happens, the entire crypto community takes a unanimous decision to introduce a Hard Fork. Ethereum worth millions of dollars was refunded in the crypto account of the DOA. A smart contract was instantly made with the help of the Hard Fork. The hacker’s account was identified, and the Hard Fork enabled the reversal of the transaction.
Thus, with the help of Hard Fork, Blockchain technology and the Cryptocurrency market have made immense progress. They are able to immediately troubleshoot any problem or discrepancy that arises in the network.