Hard Fork

We like to personify things. That’s why, when we picture the cryptocurrency universe, we picture blocks as cute little sentient beings, happily lining up to become part of a blockchain, singing that “Heigh-Ho” song from Snow White as they go.

Now let’s say that, one day, the ruler of this particular universe (let’s call her the Grand Coder) issues a decree that, from this point forward, no block can sing “Heigh-Ho” while working. They all have to sing Wiz Khalifa’s “Work Hard, Play Hard” (the edited version, of course), effective immediately. And furthermore, any blocks trying to sing “Heigh-Ho” while forming blockchains will be denied access to this work site and all of their work will be considered invalid. And further furthermore, those old “Heigh-Ho” blocks and chains aren’t going to be compatible with the new “Work Hard, Play Hard” blocks and chains.

The Grand Coder’s decree is what we call a “hard fork:” it’s a change in blockchain protocol that must be applied to all blocks going forward. Any transactions that get caught trying to do things the old way on new blockchains are invalidated and unable to be completed. Hard forks can be instituted for a number of reasons: maybe a security risk has been discovered, maybe the folks in charge disagree about the cryptocurrency’s future path, or maybe changes in the general cryptocurrency environment have necessitated some upgrades.

Hard forks shouldn’t be confused with soft forks, which are kind of the same thing, but with one major difference. A soft fork basically forces all future blocks and blockchains to conform with the new protocol, but the old and new blocks can remain compatible, while a hard fork essentially ends up resulting in two different blockchains: the old one, and the new one that's incompatible with the old one.

In other words, a soft fork is like a turn in the road, while a hard fork is—that’s right—a fork in the road.