Fork (Hard)

A change in a cryptocurrency’s software that makes it incompatible with the original version. For example, any block size increase in the Bitcoin protocol constitutes a hard fork.

Watch Video
4:41 minutes

You may have read about hard forks happening in the cryptocurrency space. They’ve happened to even the king of crypto: Bitcoin. 

To understand a hard fork, you must understand that cryptocurrencies, even Bitcoin, are run on software. That software is updated by developers. Sometimes the developers need to make a big change to the software and that change makes all previous versions null and void.

A hard fork (or hardfork), is the change to a network's protocol that makes a big change. A hard fork requires all nodes or users to upgrade to the latest version of the new software or risk being stuck with something that doesn’t work anymore.

When a hardfork happens, nodes of the newest version of a blockchain no longer accept the old version and this causes a permanent divergence from the previous version.

It’s called a fork because, like in mountain trekking, one path follows the new, upgraded blockchain, and the other path continues along the old path or -- if all the nodes/users on the old path stop using it -- the old path dies off. 

A hard fork can occur to any blockchain. And this forking process is why many digital currencies with names similar to bitcoin exist: bitcoin cash, bitcoin gold, and others can be found.

This presents a problem for the new cryptocurrency investor who might not be able to tell the difference between these cryptocurrencies and therefore invest in the wrong one. Yes, some of these hard forked currencies promised to be better than bitcoin, or correct important security risks, add new functionality, or to reverse transactions….but they’ve often failed to deliver on those promises.

So please, before you buy any coin, make sure you know if it’s gone through a hard fork before -- and which version is the best for your needs.

Watch Video
4:41 minutes