What is a Bitcoin Fork? – Robinhood

What is a hard fork?

Andreas Antonopoulos, a popular YouTuber on cryptocurrency, explains the difference between a hard and soft fork through the following analogy: If they decided to add vegan dishes, it would only be a soft fork — Anyone vegetarian could still eat vegan. However, if a vegetarian restaurant chose to add pork to the menu, it would be a hard fork because the place could no longer call itself vegetarian.

The main difference between a soft fork and a hard fork is that data for hard forks not compatible with the older version. Think PlayStation 3 and PlayStation 4. When new games come out, you need to buy the new PS4 console to play them; they won’t work on your old PS3 system–this is an example of a hard fork.

In terms of blockchain technology, a hard fork is a profound change of the network rules. It makes previously valid blocks or transactions invalid or previously invalid transactions now valid. Every node or user is required to upgrade to the new version of the network software when a hard fork occurs. Technically, the prior version of the blockchain is permanently diverged in a hard fork. The newest version will not accept nodes running the previous network protocols.

A hard fork creates a new route in the blockchain. One path obeys protocols for the new, revised blockchain, while the other still follows old network protocols. After a while, people on the old chain will upgrade to the latest version because they realize their current version is irrelevant or outdated.