Hard forks and soft forks are protocol changes in blockchain, important for security and scalability of the network.
1. Hard Fork
A hard fork is an update that is incompatible with previous versions. In the case of a hard fork, the entire network must transition to the new protocol version. An example is the split of Bitcoin and Bitcoin Cash, which led to the creation of a new cryptocurrency.
2. Soft Fork
A soft fork is an update compatible with previous versions. Old nodes can work with new blocks, but new nodes follow stricter rules. An example is the BIP 66 update for Bitcoin, which improved signature verification.
3. Difference Between Hard Fork and Soft Fork
A hard fork creates a new chain incompatible with the previous one, while a soft fork improves the current network without creating a new cryptocurrency.
4. Advantages and Risks
Hard forks can drive innovation, but they carry the risks of community splits and loss of value. Soft forks are safer but less revolutionary.
