What is Hard Fork in crypto? What are the reasons behind it? find out here 

The term hard fork is dominating crypto news lately. After the infamous Terra Luna crash, the blockchain of the Terra ecosystem went through a hard fork. Moreover, the Cardano blockchain is also looking forward to a hard fork being dubbed the Vasil hard fork in the month of June. 

So the question here is, what is a hard fork and how does it impact a blockchain? Here are your answers: 

What is Hard Fork? 

In blockchain technology, a hard fork is a significant change to the network's protocol that renders previously invalid blocks and transactions valid, or vice versa. A hard fork necessitates that all nodes or users upgrade to the most recent version of the protocol software. In simpler terms, when nodes of the most recent version of a blockchain no longer accept prior versions, a hard fork occurs, resulting in a permanent split from the previous network version. 

How do two chains emerge from a Hard Fork? 

Miners on the blockchain set the rules that move the memory in the blockchain network and all the miners need to agree on the rules of the network and also about what comprises a valid block in the chain. So when a network necessitates a forking, the miners must choose which blockchain they would choose to continue to verify. Based on this, two blockchains emerge, one which follows the old set of rules and another that follows a new set of rules. 

What are the reasons for Hard Fork? 

A hard fork may be implemented for a variety of reasons. Some of the reasons that necessitate a hard fork are: 

i) Addressing critical security flaws discovered in the earlier versions of the blockchain network, 

ii) Introducing new functionality,  

iii) Reversing transactions and others. 

Have there been Hard Forks before? 

Yes. There have been several hard forks in blockchain networks. Most recently, after the Terra Luna crash, Do Kwon, the founder of Terraform Labs had proposed that the hard fork of the Terra blockchain resulted in two networks, the first with the Terra Classic token, LUNC, and the second with the Luna 2.0 token, LUNA. 

Also, the Cardano blockchain is also set for a hard fork, called the Vasil hard fork, in the month of June. This hard fork will boost the scalability capabilities of the blockchain network.   

Moreover, one of the most famous incidents of a hard fork has been that of the Ethereum hard fork after a hack. Following the hack, the Ethereum community unanimously approved a hard fork to reverse transactions that resulted in stealing tens of millions of dollars worth of Ether. 

 Also Read: What is crypto gas fee, and how do NFT creators negotiate? Find out. - BusinessToday

Also Read: Cryptocurrency ADA maintains rally; Ether, Solana show downtrend - BusinessToday