Hard and Soft Forks – What is the Difference?
Before discussing the distinction between a hard fork and a soft fork, let’s first clarify what the word “fork” means. Let’s examine what a blockchain fork is.
Blockchain, in the area of technology, is essentially a storage space for data. Each blockchain has some information on the stages involved in transactions. By using encryption, these blockchains are connected. Moreover, a protocol change may be used to define a blockchain fork. A fork is a word used to describe modifications to a blockchain’s functionality and potential. A blockchain fork may be characterized by:
- Diversion of a blockchain’s potential course.
- A shift in protocol.
- This circumstance occurs when two or more blocks grow to the same height.
Working of a Fork
Any platform for crypto technology can start a fork. Only because of how closely blockchains and cryptocurrencies operate can this be accomplished. The guidelines for moving memory within a network are determined by the miners in a blockchain. In this manner, new forks or rules are added to a blockchain.
Nonetheless, the new set of rules must be accepted by all miners. If you are a miner who wishes to alter the new rule of validation because you disagree with it, you must use the “fork it” option. The “fork it” command will signal to each miner a deviation in the blockchain protocol, much like a fork in the road represents a change in direction.
Several digital currencies with similar names appear throughout the forking process. Corresponding to bitcoin, bitcoin cash, and bitcoin gold. It becomes challenging for newcomers to distinguish between similar cryptocurrencies.
Different Types of Forks
When more recent nodes reject an older protocol version, a hard fork occurs. A hard fork is a significant modification to a blockchain network’s protocol. In this case, blocks that were before valid become invalid, or vice versa. Two branches of the blockchain are created due to the extreme transformation, where one blockchain adheres to the previous protocol version and the other to the new one. Newer nodes permanently diverge from the prior blockchain protocol version due to hard forks. Even the older chains eventually become aware that their version is out of date and updated to the most recent version.
Example – The split of Bitcoin Cash from Bitcoin is one of the most significant instances of a hard fork in the history of cryptocurrencies. This happened in August 2017. A fundamental difference between the miners led to the division. SegWit’s effectiveness in boosting transactions was the subject of debate. SegWit opponents applied to “fork it” and chose an alternative approach. There is a conflict between the two choices. Bitcoin Cash was created due to the updated protocol, although nodes that adhered to the prior protocol continued to use the name Bitcoin.
In the context of blockchain, a soft fork is referred to as a protocol change. Here, only transaction blocks that were previously valid are rendered invalid. As the old nodes will recognise the new blocks as genuine blocks, the procedure is also known as a backwards-compatible software update. Unlike a hard fork, the rules don’t have to be accepted by every miner to be put into effect, but even a majority vote will suffice. Even new transaction entries can occasionally be labelled as soft forks.
Example – The introduction of SegWit is one of the more well-known instances of a soft fork. As history demonstrates, the miners’ community has always argued over how to speed up bitcoin transactions. An average bitcoin transaction in a block takes ten minutes to mine. The goal of miners is to include more transactions per block. The fundamental idea is to make some room in each block. This will enable blocks to include more transactions. The public key and signature linked to each transaction are eliminated via Segregated Witness, or SegWit. As a result, more transactions will be able to be added to each block, freeing up some space in the process.
Difference Between Hard Fork and Soft Fork
Soft fork and hard fork differ in their methods and characteristics. This is a list of the distinctions between hard forks and soft forks:
- Whereas soft forking is backwards-compatible, hard forking is backwards-incompatible.
- In contrast to soft fork, hard fork is reversible by nature.
- A hard fork splits the blockchain into two, while a soft fork brings the two together at the very end.
- A hard fork can make transactions that were previously entered and found to be invalid legitimate. But soft fork only can invalidate previously entered valid transactions.
- While a soft fork can be successfully implemented with most miners, a hard fork requires all miners to validate new rules.
- Comparing the hard fork to the soft one, the hard one is more private and secure.
- A hard fork modifies a blockchain’s fundamental principles. At the same time, a soft fork is used to expand a blockchain’s features and capabilities.
- A soft fork modifies a blockchain’s features, but a hard fork changes those qualities.
- A soft fork is less dangerous than a hard fork because of the reversible process.
- Reversible processes with a hard fork don’t require a soft fork, but those with a soft fork need a hard fork.
In the world of cryptocurrency, both hard and soft forks are crucial. They both are crucial to carrying out various tasks in a blockchain. A hard fork is typically requested by developers and miners due to differences in security and privacy. But a soft fork is just as crucial when modifying a blockchain and introducing new features without changing its fundamental properties.