When you read about the fork, you gotta imagine the divider on the road. When a road splits into a fork, it goes in two different directions. However, at the diversion, one road is rugged and with rocks, stones, and large potholes, while the other road is a tarred, smooth and flat. If you are driving a regular car, you won’t be able to take the rugged path. You might need a modified car for offroad use or a 4-wheel drive vehicle to traverse that rugged path, don’t you?
A fork in the blockchain is no different from a fork on the road. A fork in blockchain is a change or upgrade to the underlying protocol, and it could be a major or a minor change initiated by the community or the developers.
Once the underlying protocol is changed or the blockchain has been forked, nodes that validate transactions need to upgrade to the new protocol to see the full ledger of transactions.
Nodes are computers that validate a transaction. Once a transaction is verified and validated, it is added to a block on the blockchain network. Every node has a copy of the full ledger, and if the node is not upgraded to be compatible with the fork, then whatever new blocks are added to the chain, it will be rejected. This is because a new block is only valid after the previous block has been confirmed by validators. As such nodes require to be upgraded.
What is a hard fork?
When we talk about forks in the blockchain network, there are two forks: hard fork and soft fork. A hard fork is a permanent divergence where the blockchain divides to two. One part of the blockchain follows the old rules while the other part of the chain follows new rules, as some nodes did not upgrade to the new version while some other upgraded.
So what are these blockchain rules?
Every blockchain has its own set of consensus rules like the block size, transaction format, signature methods, etc. When there is a fork, all these rules change and nodes that do not upgrade to the new rules will reject blocks and transactions following the new rules, and eventually the node will be disconnected from the network.
For instance if you were to take the Bitcoin blockchain you will be to see transactions from the latest block to the genesis block or initial block. However, when there is a hard fork you wont be able to see the initial transactions.
What is a soft fork?
A soft fork unlike the hard fork is compatible with the older version. This means even after the fork has been made, nodes that havent upgraded to the new version can still validate transactions but they dont follow and enforce the new rules. Let’s break it down.
Lets say that after a soft fork upgrade, the block size reduced. Upgraded nodes will validate transactions based on the new block size, however, old nodes which have not upgraded may also validate the transaction. However, old nodes dont care about the new rules as they work on the old rules.
What are forks used for?
To resolve disputes:
When bitcoin started to become popular, more people started to use it. However, Bitcoin has a small block size (1MB) — the number of transactions that fit a block. As more people tried to send Bitcoin across the network clogged. This caused slow transactions and high fees — not ideal if you’re trying to use Bitcoin for everyday payments. This caused a division among users. Some in the Bitcoin community wanted to keep the block size small at 1MB while others wanted to increase the block size to 8MB. However, the dispute could not be settled, therefore, the network split with a hard fork. The new version of Bitcoin was called Bitcoin Cash.
To address a hack:
Ethereum had a project called The DAO (Decentralized Autonomous Organization). It was a smart contract that acted like a community run venture fund. However, a hacker found a glitch in the smart contract and not the network, and managed to drain $60 million worth of ETH. Some community members wanted Ethereum to do nothing about it, as they were of the frame of mind that code is law, and they wanted to maintain the immutability of the network. Some others demanded stolen funds to be returned. As such the Ethereum team create a hard fork and those who opposed the fork continued using the original fork now called as Ethereum Classic.
