A Hard Fork is a permanent split of a blockchain into two separate networks that will coexist simultaneously, running in parallel, but not affecting one another.
A hard fork, by virtue of the building blocks of all things blockchain, is really just a software update to an existing blockchain’s code.
Some of the nodes accept the software update, while some of the nodes don’t.
The nodes that do accept the update will create a whole new blockchain.
Any blocks verified and added to the original blockchain are not added to the new blockchain.
Hard forks happen for various reasons, including
- fixing security issues,
- unreconcilable disputes within the developer community,
- reversing transactions involved in a hack,
- adding new features,
- changing the fee structure or mining rewards, and
- overhauling existing code that can’t simply be patched.
Some Ethereum miners are considering a hard fork of the Ethereum blockchain due to the upcoming Merge taking place in September of 2022.
The Merge intends to switch the Ethereum consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS), eliminating the rewards that miners receive for validating transactions.
The PoW Etherem blockchain would be called ETHPoW post The Merge.
Bitcoin went through several hard forks since it’s birth, including
- Bitcoin XT
- Bitcoin Classic
- Bitcoin Unlimited
- Bitcoin Cash
- Bitcoin Gold
- Bitcoin SV
Several more forks took place.
Some hard forks, like Bitcoin Cash and Litecoin, have had success in staying popular and relevant. They are both still in the top 30 largest market cap cryptocurrencies.
Other hard forks have lost wider support, with diminishing network activity and trading volumes, usually resulting in the chains shutting down.