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What is a Bitcoin hard fork? Simply Explained!
Recently, you may have heard about a Bitcoin hard fork — but what exactly is a hard fork, how does it impact a cryptocurrency, and why do these forks happen in the first place? In this video, I’ll explain all of that in a clear and simple way, so you can easily understand the concept, even if you’re new to blockchain technology.
A hard fork is a significant change to a blockchain’s protocol that makes previously invalid blocks or transactions valid (or vice versa). It results in a permanent divergence from the existing version of the blockchain, creating two separate networks: one that follows the old rules and one that adopts the new ones. Essentially, it’s like a software upgrade that is not backward-compatible.
Hard forks can happen for several reasons — to add new features, fix security vulnerabilities, resolve disagreements within a community, or change how the blockchain functions. A famous example is the split between Bitcoin and Bitcoin Cash, where developers and the community disagreed on how to scale the network.
In this video, I’ll walk you through what happens during a hard fork, what it means for holders of the cryptocurrency, and how it can shape the future of a blockchain project.
What is a Bitcoin Hard Fork? A Human Guide to Blockchain Splits
Imagine you and your friends maintain a shared notebook of transactions. One day, half the group wants to change the rules about what can be written in it, while the others prefer the original rules. So the group splits, creating two separate notebooks with a shared history but different futures. That's essentially what a Bitcoin hard fork is—but in the digital realm.
Bitcoin Hard Forks Explained Simply
A Bitcoin hard fork happens when the Bitcoin community disagrees about the rules that govern the blockchain, leading to a permanent split. The original blockchain continues following its rules, while a new blockchain branches off with modified rules. Both chains share the same transaction history up until the fork, but afterward, they become entirely separate cryptocurrencies.
Think of it like a path in the woods that suddenly splits in two directions—once you choose one path, you can't interact with travelers on the other path anymore.
Why Do Hard Forks Happen?
Hard forks typically occur because of:
- Technical disagreements: Some developers want to improve transaction speeds or block sizes
- Philosophical differences: Debates about Bitcoin's core purpose and vision
- Security concerns: Addressing vulnerabilities that require breaking compatibility
- Restoring history: Like when Bitcoin Cash forked to reverse the effects of a hack
Notable Bitcoin Hard Forks
Several significant hard forks have shaped Bitcoin's evolution:
- Bitcoin Cash (BCH): Created in 2017 to increase block size from 1MB to 8MB, allowing more transactions per block
- Bitcoin Gold (BTG): Made mining more accessible to people without specialized hardware
- Bitcoin SV (Satoshi Vision): Forked from Bitcoin Cash with even larger block sizes
- Bitcoin Diamond: Modified privacy features and increased supply limit
What Happens to Your Bitcoin During a Fork?