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Soft fork vs. Hard fork in the world of crypto

By Rain İçerik Ekibi - May 09, 7:00 PM

Blockchains are known for their security and immutability, which are positive traits most of the time. However, when it comes to updates and changes, blockchains are not the most flexible. Despite that, there is a way to implement upgrades and new rules, namely by a hard, or soft fork—let’s see what these two mean exactly.

Why is a fork needed in crypto, and how does it work?

Blockchain forks are vital elements of all crypto ecosystems, as they have the potential to rejuvenate entire networks and make them better overall. The usual reason behind blockchain forks is simply the need for a major upgrade or mechanism change, just like conventional applications’ regular updates.

Forks in crypto work uniquely, that is, they create entirely new blockchains. The reason for that is the immutability of blockchains; not even developers can change its predetermined rules, meaning they need to abandon it outright, and create a new version of it with the updated guidelines. To ensure that the data stored on the old version is not lost, the new blockchain is directly connected to it, albeit in a special way that is not necessary to discuss in this article.

What is a hard fork in crypto?

A hard fork in the world of crypto is an update of a blockchain that only part of the community accepted and implemented. This means that while there is a new blockchain created, the old version also continues to run as before with those participants who didn’t want the fork in the first place. The new chain, however, is now handled by only those who agreed to abandon the old, and support the updated rules. Examples of hard forks in crypto could be Bitcoin Cash (forked from Bitcoin), Bitcoin SV (forked from Bitcoin Cash) and Litecoin (forked from Bitcoin).

What is a soft fork in crypto?

A soft fork in the crypto world is a similar phenomenon as a hard fork, but with key differences. A soft fork also creates a brand-new blockchain with a fresh set of rules. However, contrary to a hard fork where the old chain continues to run, a soft fork means the entire network unanimously agrees on an update, thus the old chain is fully abandoned and discontinued. Soft forks are much more common than hard forks, as they are simple updates of networks, rather than opinion splits that create two separate ecosystems. Soft fork examples in the crypto world are plentiful, such as most of the Ethereum updates.

Hard and soft forks are crucial elements of every blockchain network that wants to keep up with the most recent advancements by updating itself. Be it the creation of two, continuously functional ecosystems, or just one additional, but upgraded blockchain, forks are the only way to implement changes to otherwise fully immutable systems, which goes on to demonstrate the true power and safety of this technology.

Rain is a Crypto-Asset Services Provider headquartered in İstanbul. Rain provides services to its users at financial institution standards.

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