Excerpt from the lesson “Forks in Blockchain”

Forks in Blockchain: Understanding the Difference Between Soft Fork and Hard Fork

 Blockchain Forks: Understanding Soft Fork and Hard Fork

Blockchain is a complex and innovative technology that underpins many modern cryptocurrencies. However, sometimes the rules within a blockchain network need to be changed or updated. For this purpose, there are forks, which can be divided into two types: soft forks and hard forks. In this article, we will explore their differences and how they affect the network’s operation.

What is a Fork?

A fork in blockchain is a change to the rules by which the network operates. Imagine you have a railway line, and you want to change the path: you can make minor changes that still allow trains to run on the old tracks, or you can build a new path that is incompatible with the previous one.

Soft Fork: Gentle Rule Changes

A soft fork is a blockchain rule change that is backward compatible with previous versions. This means that updated nodes (network participants) will follow the new rules, but old nodes can continue to operate and recognize the new blocks.

Example: Imagine playing football and deciding to reduce the size of the goalposts. Updated players (nodes) will play by the new rules, but old players (nodes) can also participate, accepting the smaller goalposts.

How it works:

1. Starts with the original block (genesis block).

2. Moves to a block containing transactions.

3. Splits into two parallel blocks: one for old nodes and one for new.

4. The chain continues with updated nodes, but old nodes can also recognize the new blocks.

A soft fork minimally disrupts the network, and over time, all nodes may update to avoid potential disagreements.

Here is an illustration that clearly demonstrates the soft fork process:

Hard Fork: Network Splitting

A hard fork is a more radical change that creates two incompatible blocks. This means that updated nodes will follow the new rules and not recognize old blocks, while old nodes will continue to operate by the old rules, forming a new chain.

Example:

Returning to our football game, now you decide to change the rules so that old and new players cannot play in the same game. Some play with reduced goalposts, and others with the original ones.

How it works:

1. Starts with the original block (genesis block).

2. Moves to a block containing transactions.

3. Splits into two independent chains: one for old nodes and one for new.

4. The chains are not compatible, creating two different currencies (one old, one new).

Conclusion

Forks are an essential mechanism for updating and improving blockchains. A soft fork allows changes to be made with minimal disruption to the network, while a hard fork results in the creation of two distinct networks and currencies. Understanding these processes helps in better navigating the world of cryptocurrencies and blockchain.

By grasping these terms, you get closer to understanding how blockchain works and why forks play a crucial role in its development.