What is the difference between a hard fork and a soft fork in the context of cryptocurrency?

3 answers

• Dec 16, 2021 · 3 years ago
  A hard fork in cryptocurrency occurs when a blockchain splits into two separate chains, resulting in the creation of a new cryptocurrency. This usually happens due to a fundamental change in the protocol or rules of the blockchain. Hard forks require all participants to upgrade their software to the new version in order to continue using the network. Examples of notable hard forks include Bitcoin Cash, Bitcoin SV, and Ethereum Classic.
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• Dec 16, 2021 · 3 years ago
  On the other hand, a soft fork is a backward-compatible upgrade to the blockchain protocol. It does not result in the creation of a new cryptocurrency, but rather introduces new rules that are compatible with the existing network. Participants who have not upgraded their software can still continue to use the network, but they may not be able to take advantage of the new features or improvements. An example of a soft fork is the implementation of Segregated Witness (SegWit) in Bitcoin.
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• Dec 16, 2021 · 3 years ago
  From a technical perspective, hard forks and soft forks differ in their impact on the consensus rules of a blockchain. Hard forks require a majority of the network's participants to adopt the new rules, while soft forks only require a majority of the network's hash power. Hard forks are often seen as more contentious and can lead to community splits, while soft forks are generally considered less disruptive. It's important for cryptocurrency users to stay informed about upcoming forks and understand the potential implications for their holdings.
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