Hard and Soft Fork – Simply explained

A fork is simply just an update of a cryptocurrency protocol. Most of these updates or small and they come about on a regular basis.

When these updates are, however, significant and can crucially change how a cryptocurrency works a hard fork can occur. In such cases, developers and miners can decide that enough is enough and they can head in a new direction by forking the blockchain and shaping a new protocol version. They copy the protocol of a cryptocurrency they used to support (let’s say Bitcoin) – which is open source and they implement the changes they couldn’t before.

Because a fork is based on the original blockchain, all transactions that happened on the original blockchain also happened on the fork. So, if you had coins on the original protocol, you will also get the same amount of the new cryptocurrency. Once a new protocol arises, the new cryptocurrency is on its own and is incompatible with the original.

A soft fork occurs when the changes are compatible

Cryptocurrency: Bitcoin – Popular Hard forks: Bitcoin Cash, Bitcoin Gold
Cryptocurrency: Ethereum – Popular Hard fork: Ethereum Classic

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