Soft Fork vs Hard Fork: Detailed Guide

Soft Fork vs Hard Fork: Detailed Guide

Forks has become a powerful tool used in blockchain development. It helps solve various problems suggested by blockchain users. The guide below describes two types of forks: soft and hard forks.

Every system requires an upgrade or change at a certain point. There is a frequent need to introduce an additional feature or correct a minor flaw in the setup. Many software developers fix bugs and frequently release updated versions of their wares. Blockchain users can also suggest making some changes to the blockchain even though the blockchain system is an immutable digital ledger technology (DLT). A fork is a set of actions needed to change the blockchain. There are two types of forks: soft forks and hard forks.

Forex as an Evolution of Blockchain

Since 2008, the blockchain system has been a permanent and immutable system. Users must abide by the principles of the blockchain, and there was no room for complaints. Error issues, unauthorized transaction activities, and security loops are beyond repair on the system. Fortunately, an amazing turnaround occurred in 2016 when the founder of Ethereum (ETH), Vitalik Buterin, made a fork operation. He implemented it to reverse the stolen funds for a project launched on Ethereum. Subsequently, the fork became a powerful tool used in the development of the blockchain. It helped solve many problems suggested by blockchain users.

Understanding soft forks

Soft fork is a backward compatible way to add a new set of rules to the blockchain network without forcing nodes and miners to upgrade to the current blockchain version. However, the blockchain requires many nodes and miners to switch to the upgraded version. This type of fork allows interaction between the old and new blockchains.

A good example of a soft fork is Bitcoin’s SegWit (separate witness).BTC). The fork was activated in 2017 to fix transaction handling and help the volume of bitcoin. Bitcoin blockchain participants have agreed to solve some trivial challenges to the chain. Some of these issues included insufficient block size and slow transaction speed on the chain. As a solution, they introduced SegWit to free up space that could disrupt more transactions on the chain. The new blockchain accepts many transactions within 1 megabyte at a faster rate, which speeds up the process of verifying transactions.

Understanding Hard Forex

Unlike soft forks, hard forks create a different path of the blockchain parallel to the original blockchain. Here, the upgrade requires all nodes and miners to join the new chain; This fork is not backward compatible. The old and new chain operate independently without any form of interaction between them. Blockchains can implement hard forks to fix security flaws, add new trading features, change the full version of cryptocurrency or reverse transactions.

After the SegWit soft fork, some Bitcoin nodes complained that the network was unable to accept larger transactions. These nodes and developers created a separate blockchain called Bitcoin Cash (Biosafety Clearing-House). They designed the Bitcoin Cash network to accept transactions of up to 32MB. Bitcoin Cash ranks 30th in the market capitalization rankings. Bitcoin Cash developers hope that merchants will abandon the Bitcoin blockchain due to high transaction fees. Later, Bitcoin Cash was divided into two groups: Bitcoin Cash ABC and Bitcoin Cash SV. Each part of Bitcoin Cash had its different goals. Part of the fraction wants to preserve the system, and the other is planning to increase the block size from 32 MB to 128 MB. Other Bitcoin hard forks that have been made include Bitcoin Gold (BTG), Bitcoin Diamond (BTCD), Classic, Unlimited, etc.

On 20I6, the Decentralized Autonomous Organization (DAO) was launched on the Ethereum network. DAO has raised more than $150 million from its fundraising activity. After the launch of the DAO, hackers stole more than $60 million in Ethereum from investors. A new Ethereum blockchain has been created to help the original owners retrieve funds from the hacker’s wallet address. Besides, they have made a soft fork to prevent hackers from transferring money from their wallets.

Soft Forks vs Hard Forks

The blockchain is free to choose its preferred fork. Notably, the hard fork is not compatible with the previous blockchain version while the soft fork is compatible with the old version. Hard fork completely changed the blockchain protocol, requiring all nodes to be upgraded to the new version. Meanwhile, the e-fork only requires an optional upgrade to the current version. Unfortunately, developers can easily manipulate miners to validate transactions against blockchain regulations. Hard forks make the blockchain vulnerable to money loss and double spending situations. There can be discord in the community if the hard fork is controversial. A well-planned solid fork can ensure overall adoption. Most of the time, the blockchain community can conduct soft forks without any social cleavage. However, many blockchain developers and nodes prefer hard forks.

Forex benefits for investors

There are many advantages of forks. It provided a path to change the blockchain, an immutable digital ledger technology. The fork allows for the incremental development of the blockchain. The fork also allows traders and investors to get motivated to improve the performance of the blockchain. Provides a way to increase storage capabilities and speed. After the success of the Hard Fork, the investors will receive an equivalent amount of the original cryptocurrency with the new currency.

Unfortunately, the fork is vulnerable to dump attacks from crypto whales and major investors. They can buy large amounts of the original token before the fork and earn a larger amount after the fork. As expected, the base effect increases the price of the parent cryptocurrency. These whales then sell the previously acquired tokens, causing the tokens to drop in price. It’s an unfair way to take advantage of a fork. However, some blockchains can suspend trading activities before the fork begins.

Recently, Ethereum completed the transition from a Proof of Work (PoW) mechanism to a Proof of Stake (PoS). Unlike PoW, PoS provides a more secure, less power consuming and optimized platform to implement new scaling solutions. Interestingly, traders can now trade with relatively low gas fees. Ethereum halted all trading activity a few hours before the merger took place. Perhaps the action of Ethereum was due to the flying speculations of a pump in the price after the operation.


A great deal of software, games, and systems require timely upgrades to the way they operate. This routine does not exclude the blockchain network. Forks allows the blockchain to implement the proposed upgrades. Blockchain developers, miners, and node miners can improve the efficiency and productivity of the blockchain through a fork in the road.

Hard forks and soft forks play essential roles in maintaining and modernizing a decentralized network. Forks is also helping to tighten the security of the blockchain.

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