Hard and Soft Forks - What is the difference between them?

What is a fork in a blockchain? And what are the types of fork existing in a blockchain? How do these forks vary from one another? And what are the particular functions they discharge in a blockchain? Is a fork in a blockchain similar to a fork in a highway? 

 

Well, we have the answers for all your questions relating to hard fork and soft fork. In this blog, we will discuss their differences as well as relevant examples. 

 

 

What is the meaning of ‘Fork’ in blockchain?

 

Before jumping to the difference between hard fork and soft fork. First let us revise the meaning of fork. Let us understand what a fork in a blockchain. 

 

In the technical world, blockchain is basically a compartment of data. Each blockchain contains some data related to transactional steps. These blockchains are connected to each other by the means of cryptography. And a blockchain fork may be defined as a change in protocol. The changes in the process and potential of a blockchain is often termed as a fork. A fork in blockchain maybe defined by:

 

1. Diversion of potential path of a blockchain.

 

2. A change in protocol.

 

3. A condition when two or more blocks attain the same height.

 

Forks are of different kinds, they can either be temporary or permanent. Permanent forks exist forever in the network while temporary forks are short-lived and are created under certain situations and conditions.

 

Forks can be introduced by the members or developers of the crypto community. Sometimes, forks are initiated as a path to crowdsource funding or new technology projects. Members who become dissatisfied with the services offered by existing blockchain also can also lead to the formation of a blockchain fork.

 

Suggested blog: Semi-fungible crypto token

 

Working of a fork

 

A fork can be initiated in any crypto-technology platform. It is possible only because cryptocurrency and blockchains almost work in similar ways. The miners in a blockchain set the rules to move memory in the network. In this way new rules or new forks are introduced in a blockchain. 

 

However, all miners have to agree to a new rule set. In case you are a miner, who doesn’t agree with the new rule of validation and wants to change it, then you need to apply the ‘fork it’ option. Like a fork in between a road symbolizes diversion of route, similarly, the ‘fork it’ will indicate every miner a diversion in the protocol of the blockchain.

 

During the entire process of forking many digital currencies with similar names appear. Like bitcoin, bitcoin cash, and bitcoin gold. For the beginners it becomes difficult to tell the difference between similar cryptocurrencies. 

 

Read more, Top 10 cryptocurrencies.

 

 

What are the types of forks in blockchain?

 

Blockchain forks are classified into two major types.

 

1. Hard fork

 

2. Soft fork

 

Hard fork

 

Hard fork occurs when newer nodes don't accept the older version of protocol. Hard fork may be defined as a radical change in the protocol of a blockchain network. Here the previously valid blocks are made invalid or vice-versa. 

 

The radical change thus, results into two branches of the blockchain. Where the one blockchain follows the previous version of protocol while the other blockchain follows the new version of blockchain. 

 

Hard fork causes permanent divergence of newer nodes from the previous version of the blockchain protocol. After a time, even those old chains realize that their version is outdated and upgrade itself to the latest version. 

 

During the process, miners have to choose a blockchain for verification, while holders of the original blockchain will be granted tokens in the new forks as well. A hard fork can happen in any blockchain like Bitcoin, Bitcoin Cash etc. 

 

The process of hard fork is sometimes referred to as backward-incompatible software update. 

 

Example: Rise of Bitcoin cash

 

One of the biggest examples of hard fork in the history of cryptocurrency is separation of Bitcoin Cash from Bitcoin. It occurred in august 2017. The split arose due to a fundamental disagreement between the miners. 

 

The question was if SegWit was the best way to increase transactions or not. People who are against SegWit, applied ‘fork it’ and decided to implement a different solution. There arises a split between two decisions. 

 

The newer version of the protocol led to the formation of Bitcoin Cash, while the nodes who followed the older version retained the name, Bitcoin.

 

Reference blog, Bitcoin Cash VS Bitcoin.

 

Soft fork

 

A soft fork in blockchain is defined as a change in the software protocol. Here only previously valid transaction blocks are made invalid. The process is also called a backwards-compatible software update, as the old nodes will identify the new blocks as valid blocks. 

 

Speaking of softwares, check out our blog on Software Documentation

 

Unlike hard fork, not all miners need to agree to implement the rules, but even an agreement among the majority of miners will work. Sometimes, even a new transaction entry is also coined as a soft fork. 

 

A soft fork can also happen during the time of temporary divergence in blockchain. Or when miners violate a new consensus rule that their nodes don’t know. Unlike hard forks, soft forks don’t require nodes for the maintenance of consensus.

 

Example: Adoption of SegWit

 

One of the popular examples of soft fork is the introduction of SegWit. History is proof the miners’ community has always debated on the best way to increase bitcoin transaction speed. Generally, it takes around ten minutes to mine a bitcoin transaction in a block. Miners always want to increase the number of transactions in a block. 

 

To achieve this the miners’ community proposed a solution, Segregated Witness or SegWit. The basic principle is to free up some space in each block. This will help to include more transactions in a block.

 

Segregated Witness or SegWit works by removing the public key and signature associated with each transaction. This will free up some space from each block and thus will help in adding some more transactions in the same block. 

 

The change allows both the new and old formats to exist. It permitted the old protocol to be also recognized and processed.

 

Suggested blog: Blockchain ETFs.

 

 

What is the difference between Hard Fork and Soft Fork?

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Difference between Hard Fork and Soft Fork

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Hard fork is a contradiction to soft fork in their process and properties. The list of differences between hard fork and soft fork is given below:

 

1. Hard fork is a backwards-incompatible process, while soft fork is a backward-compatible process.

 

2. Hard fork is reversible in nature, while soft fork is irreversible.

 

3. Hard fork creates two blockchains, while soft fork at the end combines the split into one.

 

4. Hard fork can valid previously entered invalid transactions and vice-versa. While soft fork only can invalidate previously entered valid transactions.

 

5. Hard fork requires all miners to validate new rules, while soft fork can work well with the majority of miners.

 

6. Hard fork is more secure and private when compared to the soft fork.

 

7. Hard fork changes the entire rules of a blockchain. While a soft fork is used to add new functions and properties to a blockchain.

 

8. Hard fork alters the characteristics of a blockchain, while soft fork modifies the characteristics of a blockchain.

 

9. Due to the reversible process, a soft fork is safer than a hard fork.

 

10. Hard fork doesn’t require a soft fork for reversible process, while soft fork requires a hard fork for reversible process.

 

 

A way forward

 

Both hard fork and soft fork are essential in the crypto world. They both are important to discharge different duties in a blockchain. Usually, the developers and miners call for a hard fork considering the difference between their security and privacy safety. 

 

But soft fork is equally important when it comes to the modification of a blockchain and adding new functions to it without altering the actual characteristics.