Hard Fork

A hard fork is a permanent and non-backward compatible change to a blockchain’s protocol that creates two separate and independent chains. After a hard fork, nodes running the old software reject blocks from the upgraded chain and vice versa, resulting in a split. Unlike soft forks, where updated and non-updated nodes can still interact, hard forks enforce new rules that are incompatible with the previous version. These splits can be planned, when there's broad community agreement—such as Ethereum's upgrades like Byzantium and The Merge—or contentious, when disagreements lead to the creation of entirely new cryptocurrencies, as with Bitcoin Cash or Ethereum Classic. In contentious hard forks, holders of the original asset typically receive a copy of their holdings on the new chain. While this can lead to innovation and protocol improvements, it also carries the risk of dividing the community and reducing the strength of the original network. Hard forks mark pivotal moments in a blockchain's development, enabling deep changes to its rules, consensus mechanisms, or governance structures, but they must be handled carefully to avoid fragmentation and confusion.