Understanding the Differences between Soft Forks and Hard Forks
Cryptocurrency is a revolutionary technology that has disrupted the way we think about money. Cryptocurrency and the blockchain technology that supports it have been used to create a range of applications and services, as well as variety of digital currencies. Many of these digital currencies require changes to their underlying protocol to keep them operating and up to date. This is when a ‘fork’ is used. A “fork” is when an existing blockchain splits into two “forks”. These forks are either “soft” or “hard”, and the differences between them are important to understand in the cryptocurrency space. This article will explain the differences between a soft fork and a hard fork and the importance of understanding these differences.
What Is a Soft Fork?
A soft fork is a software upgrade made to the underlying blockchain protocol. This upgrade does not involve a chain split, meaning that transactions remain valid on the same blockchain after the soft fork is completed. Soft forks are essentially updates to the existing blockchain protocol, and are intended to be non-contentious, meaning that the majority of miners and validators agree with the upgrade.
A good example of a soft fork is when Segwit, a payment protocol upgrade, was implemented. More specifically, Segwit was a software upgrade that was only accepted by some miners, which allowed them to process blocks faster by reducing the overall network load. By introducing Segwit, the mining pools that accepted it could gain an advantage over those that didn’t.
What Is a Hard Fork?
A hard fork is a radical change to the underlying blockchain protocol and results in a split of the blockchain into two incompatible blockchains. It is also referred to as a “consensus fork”, as it requires all users to upgrade their software in order to continue to accept and validate valid transactions on the blockchain.
An example of a hard fork is the Ethereum network’s Byzantium upgrade. This upgrade was initiated to reduce the amount of computation that is needed to process transactions, which is an important step towards building a decentralized platform. The upgrade resulted in the splitting of the Ethereum network into two blockchains, one utilizing the new Byzantium protocol and one utilizing the old Ethereum protocol.
Importance of Understanding the Difference
It is important to understand the difference between a soft fork and a hard fork, as understanding these differences can help you make more informed decisions. Soft forks involve non-contentious changes to the blockchain’s protocol that are generally seen as positive updates and are welcomed by most in the community, whereas hard forks generally involve more radical changes that are not unanimously accepted and require more community consensus.
It is also important to understand the differences between soft forks and hard forks because it can help you decide which approach is best for implementing desired changes to the blockchain protocol. Soft forks are usually less controversial, as they can be implemented with much less risk, while hard forks can involve significant risks such as security, instability and potential chain splits that can compromise user experience.
In short, soft forks involve updates and changes to the blockchain protocol that are accepted by the majority, while hard forks involve radical changes that may split the blockchain into two incompatible chains. It is important to understand the differences between the two in order to make more informed decisions about which type of fork is best for implementing desired changes and updates.
