Blockchain Basics | Difference Between Soft Fork and Hard Fork

Most people are aware of the ongoing maintenance and upgrades needed to increase the effectiveness of their applications thanks to the ongoing improvements in technology. Therefore, when the online banking applications on your device prompt you to upgrade it, you certainly won’t challenge it. 

On the other hand, it’s possible that as soon as your smartphone connects to the internet, it automatically updates. Furthermore, if you don’t install the network’s advanced version, you can experience operational problems and run the danger of losing access to its services.   

The same process for upgrades and improvements also underpins the blockchain platform. However, centralized network operators can swiftly update their software with cutting-edge features at the network level, but decentralized applications, including cryptocurrencies on a blockchain platform, require a different, more sophisticated technique.       

For instance, blockchains are decentralized, transparent systems that lack central control. Therefore, the decision to upgrade the platform requires the consent of all data traffic. A fork is seen as a special way to update or enhance a blockchain. 

Forks are divided into two groups based on how they are used: soft forks and hard forks. We will explore blockchain basics and find out the distinction between soft forks and hard forks. 

What Are Blockchain Forks Exactly?

A blockchain, at its simplest level, is a group of database files connected by secure cryptographic credentials to form a chain of blocks going back to the first one. 

As a result, it ends in the blockchain being visualized as a smooth path made of connected blocks. Each improvement to the network needs a change in the consensus across the blocks since the fragments are connected by an arrangement that each block accepts. The prospects of achieving such a consensus, however, are essentially nonexistent because the blocks are connected through a set of virtually unchangeable standards.

Forks are typically utilized to make changes to a blockchain instead of rewriting every piece. On the blockchain network, a fork is a process by which the original program is replicated and the necessary changes are done. The latest blockchain splits into two sections, creating a fork-like deviation from the main blockchain because two blockchain systems cannot collaborate.

Who is Responsible for Blockchain Forks?

Blockchain experts claim that because there is no single body in charge of managing the blockchain, it is up to the system’s users to choose a course of action and implement changes that improve the general operation and effectiveness of the system.

Blockchains contain a variety of diverse components, ranging from miners and traders to full-node creators. Who therefore gets the last say on what system upgrades to implement? Additionally, because each segment contributes greatly to the network, certain individuals have more clout in the electoral process than others.

The authenticity and appeal of the fork variants are probably determined by miners, who, for instance, protect the system by assigning computing power for block verification. Any fork variant that the miners accept is likely to triumph since they will supply the computational power necessary to keep the system running.

A sharing responsibility over the split generation process is made possible by the majority of open-source blockchains by allowing for the repetition of tasks. Full node users, who act as the system’s base and inspectors, verifying and preserving the blockchain’s ledger, and programmers, who create and optimize the fundamental programming scripts for the blockchain technology, are other subcategory occupations.

Let’s explore the soft forks and hard forks and see how they are different. 

What is Hard Fork?

Forks are changes to the system architecture of the blockchain that cause the main blockchain system to divide. A fork on an old blockchain system that has cryptocurrency operating on it will result in the creation of a second coin on the freshly branched blockchain system. During a hard fork, the blockchain’s parameters are modified or changed, rendering the older blockchain and the newer blockchain irreconcilable.

This indicates that the older miners will reject the recently updated blocks and that the modern blockchain will operate according to new rules that will perpetually reject blocks from the older blockchain. This practice is referred to as a “backward-incompatible” software upgrade.

For example, the Bitcoin community disagreed on the best method for expanding the blockchain platform, leading to the development of a hard fork on the Bitcoin blockchain system. On one side of the issue were those who wanted to increase the block size.

On the other hand, the community members who opposed such reforms prevailed. People who wanted to increase the block size joined the Bitcoin Cash fork, while those who want to continue on the existing Bitcoin system did not. As a result, even though Bitcoin and Bitcoin Cash operate on different blockchains, their prior records are similar.

What is Soft Fork?

A hard fork is a huge change to the blockchain protocol that is not backward compatible, meaning that all nodes in the network must upgrade to the new version to continue participating in the network. 

This can result in the creation of a new cryptocurrency, as occurred with the creation of Bitcoin Cash in 2017. A soft fork, on the other side, is a change to the blockchain protocol that is backward compatible, meaning that nodes operating the old version of the software can still participate in the network.

A soft fork allows for two different versions of the blockchain to coexist, with the old version still accepting the new blocks of transactions that conform to the modified rules. An instance of a soft fork is the Segregated Witness (SegWit) upgrade to the Bitcoin protocol in 2015, which aimed to grow the effective block size from 1MB to 4MB by modifying the way that signature information is stored within transactional blocks.    

The goal of the Segregated Witness (SegWit) upgrade to the Bitcoin protocol was to increase the capacity for transactions on the blockchain by separating signature data from the transactional data within each block. This allowed for more transactions to be processed within each block, improving the efficiency of the blockchain. 

The implementation of the soft fork enabled the old version of the Bitcoin blockchain to accept both the larger 4MB blocks and the smaller 1MB blocks, as the new rules did not conflict with the old ones. The use of a soft fork allowed the old nodes on the network to continue to validate new blocks, thanks to the backward-compatible nature of the change.

What’s the Difference Between Soft Fork and Hard Fork?

There is debate within the blockchain and cryptocurrency communities about the benefits and drawbacks of soft forks and hard forks. Soft forks are generally seen as less disruptive than hard forks, but they can still pose risks.      

For example, malicious actors may try to use a soft fork to trick full node operators and miners into accepting transactions that violate the rules of the blockchain. Full node operators serve as the blockchain network’s auditors, maintaining a complete copy of the blockchain at all times and ensuring that each new block follows the rules of the network.

 If a group of individuals on the blockchain tries to change the rules without informing the full node operators, it could undermine the trustworthiness of the network.

Bitcoin’s decentralized nature is maintained through the use of full node operators and miners who independently verify the authenticity of the ledger. This helps to enforce important economic rules such as double-spending prevention and the blockchain’s inflation formula. 

However, if full node operators and miners are tricked into accepting blocks that violate these rules, it could lead to the acceptance of incorrect blocks and potentially cause the failure of the blockchain. To mitigate this risk, many blockchain platforms make sure that all soft forks are transparent and open to the public.

Hard forks also present their own set of concerns. One of the main issues with hard forks is that they can lead to the division of communities, as there is no center with a hard fork. In addition, some argue that hard forks are harmful because they split the hashing power of the platform, reducing its overall security and processing capabilities.

Which Blockchain Fork Is Better?

Cryptocurrency exchanges and other businesses may view hard forks and soft forks as serving different purposes. While hard forks that are controversial or poorly planned can cause division within the community, well-planned hard forks can also result in software changes that are widely accepted. 

On the other hand, soft forks are often seen as a more gentle and diplomatic way of introducing changes to the blockchain. If the changes are written in a way that does not conflict with the existing rules, there is less risk of fragmentation within the community.

A lot of effort needs to be done to ensure a seamless transfer of blockchain maintenance and updates, regardless of the split method employed. Hard forks are preferred by the majority of blockchain miners and traders because they lessen the risk of approving or mining incorrect blocks.

Hard forks ensure that blockchain users, including miners and traders, are not left behind or duped, especially while they are in use. However, hard forks use a lot of computational power and are thought to be detrimental to the development of digital currencies.

Despite the growing uncertainties, soft forks offer a vastly faster alternative to blockchain software updates without using up additional computing resources. Soft forks are frequently commended for their capacity to introduce improvements without producing a division in society.

Conclusion

Updates and upgrades are necessary for any software, including blockchain networks, for the software to achieve its full potential and meet the evolving needs of users. Hard forks and soft forks allow for decentralized changes to be made to the software without the requirement for a central authority to oversee the process. Without the ability to implement forks, networks would be unable to adopt new features and would have to rely on centralized systems for control.