Understanding Forks in Blockchain: Protocol Updates and Network Splits

Hard Fork: Basic Definition and Function

In the field of cryptocurrency and blockchain technology, a hard fork refers to the process of diverging from an existing blockchain software version to create a completely new version that does not support the old versions. This results in backward incompatibility; that is, network participants operating with the previous software version can no longer function under the new protocol.

The essence of a hard fork is to fundamentally change a cryptocurrency’s protocol. Modifications to key parameters such as block size, transaction validation mechanisms, or security settings necessitate a hard fork. The most notable outcome of these changes is the splitting of the blockchain into two. At the moment of the fork, the original network and the new protocol-supporting network diverge into two independent paths. As a result, the initially single cryptocurrency can evolve into two different blockchains and potentially two separate assets.

Adding new rules to the blockchain system’s code initiates the forking process. Initially, both chains share the same history, but after the fork point, they develop independently. Nodes using the old protocol continue to operate with the existing coins, while participants switching to the new system can generate new assets called altcoins.

Why Is a Hard Fork Implemented?

The primary reasons for implementing a hard fork are to enhance system security and to add new functionalities. Critical security vulnerabilities identified in older versions of the software can be patched through a hard fork. Additionally, hard forks are used when increasing network capacity, improving transaction speed, or making radical changes to the protocol logic are necessary.

Furthermore, in exceptional cases such as reversing transactions or canceling specific blocks, a hard fork is an effective method. For example, after a security breach, a hard fork may be used to revert malicious transactions.

What Changes After a Hard Fork?

After a hard fork, two options emerge within the blockchain. The first scenario involves all network participants accepting the new protocol; in this case, the old version is quickly abandoned, and the system continues to operate according to the new standard.

The second scenario involves some participants rejecting the new protocol and choosing to remain on the old chain. In this case, the fork truly occurs; the original blockchain and the new blockchain continue to exist as separate entities.

Forking Mechanism: Technical Process

A blockchain fork is an event that occurs during the implementation of protocol-level changes. Cryptographic networks are operated by hundreds or thousands of computers and miners. These participants communicate with each other to verify the entire transaction history and to facilitate the creation of new blocks.

When a protocol change is made, it must be accepted by consensus among all network participants. If consensus is reached, the new protocol is implemented across the entire network, and the chain continues its normal flow. However, if disagreements arise regarding the change, some nodes will continue supporting the old protocol while others switch to the new one. In this case, the blockchain permanently splits into two separate networks, each following its own development path.

A hard fork is an inevitable event when systemic changes are made to a blockchain, and its successful implementation depends on all network participants reaching a common consensus.