📖
Web3 Encyclopedia
  • Welcome aboard!
  • Source
  • 😀Evolution from Web 1.0 to Web 3.0
    • Web 1.0 Web 2.0 Web 3.0
    • Key Features
    • Current Limitations
    • Future of Web 3.0
    • Learn: What Is Web3?
    • Learn: Will Every Brand Have a Web3 Strategy?
    • Learn: Big Ideas in 2023
    • Learn: The Web3 Paradox: Why Scaling Usage Alone Won't Lead to Mass Adoption?
    • Learn: Is Web3 A Marketing Buzz or Tech Revolution?
    • Learn: What is the relationship between blockchain and Web3?
    • Learn:Empowering Women in Web 3.0: The Role and Contributions of Women in Blockchain, DeFi, and dApp
    • Learn: Web 3.0 and the Future of E-Commerce
    • Learn: 12 ways ecosystem projects can attract more developers
    • Learn: How Web3 is Impacting Education?
    • Learn: Web3 And The Future Of Digital Advertising
    • Learn: Web3’s impact on personalization, trust and engagement
    • Learn: Web3-Powered Identity Management -- Unlocking the Benefits of Decentralization
    • Learn: Why Web2 companies fail in Web3 while others made it?
    • Learn: To Identify or Not in a Web3 World?
    • 🤫[Insider Series] McKinsey x Web3
    • TL;DR 👀
  • 💲Blockchain Fundamentals
    • Why is Blockchain So Popular?
    • Introduction to Blockchain
    • Blockchain Misconceptions
    • Blockchain vs Bitcoin, Database, Cloud
    • Consensus Mechanism
    • Public and Private Keys
    • Hash Functions and Cryptography
    • Sharding
    • Types of Blockchains: PoW, PoS and Private
    • Understanding Cryptocurrency
    • Coins vs Tokens
    • Blockchain Trilemma
    • Legality
    • Learn : Google’s Cloud Based Blockchain Node Service
    • Learn: How Blockchain, Digital assets, and Web3 Unlock Financial Inclusion Globally
    • Learn: Will Chinese-Made Crypto Soar Higher?
    • Learn: What Does MiCA Mean for Crypto in Europe?
    • Learn: Unraveling the Intricacies of Blockchain Forensics and Asset Tracking
    • Learn: Promising blockchain use cases in healthcare industry
    • Learn: The Role of Blockchain in Authenticating and Provenance Art
    • Learn: Blockchain-Based Digital Identity: Benefits, Risks, and Implementation Challenges
    • Learn: The Future of Energy Supply Chains
    • Learn: Revolutionizing smart contracts and cryptocurrency
    • Learn: Nigeria goes blockchain
    • Learn: A Game Changer for Online Gaming?
    • Learn: Is blockchain technology ready for high-storage applications?
    • Learn: Will Blockchain Technology Mark a Turning Point in Fraud Prevention?
    • Learn: Why ZK-rollups need data availability?
    • Learn: How will generative AI disrupt blockchain?
    • Learn: A New Blockchain for Generative AI?
    • TL;DR 👀
  • 🏟️Web3 Utilities
    • Decentralized Applications (dApps)
    • Cross-chain Bridges
    • DAO
    • Artificial Intelligence
    • Learn: Is Community-building Essential for Web3 Startups?
    • Learn: ‘Decentralization Theater’
    • Learn: Crypto and AI- A yay or nay combination?
    • Learn: Dissecting the DAO
    • Learn: What is motivating Lido DAO to rise?
    • Learn: How to Turn Your Community Into a DAO?
    • Learn: The Key to Decentralized Decision Making
    • Learn: How Web 3.0 can disrupt the supply chain industry?
    • TL;DR 👀
  • 🪙Bitcoin
    • What is Bitcoin
    • Bitcoin's Blockchain Technology
    • UTXO Model and Transaction Fees
    • Bitcoin Mining and Mempool
    • Learn: What is bitcoin mining?
    • What are Hard Forks and Soft Forks
    • What is SegWit and the Lightning Network
    • Bitcoin Ecosystem
    • Can Bitcoin be Destroyed? Game Theory and Network Attacks
    • Learn: Crypto token supplies explained
    • Learn: What is crypto tax-loss harvesting, and how does it work?
    • Learn: Can Crypto Go Green? How to Invest in Eco-Friendly Cryptocurrencies
    • Learn: Why Did FTX Collapse? Here’s What to Know.
    • Learn: How Sam Bankman-Fried swindled $8 billion in customer money?
    • Learn: How much is Bitcoin worth today?
    • Learn: The Costs of Running a Bitcoin Node In Nigeria
    • Learn: Has 2022 Left Any Crypto Positives?
    • Learn: How Crypto Exchanges Can Be Free of Risk?
    • Learn: Greed, Lies and FTX: Is Crypto a Force for Good or Evil?
    • Learn: Is Crypto a Cultural Movement?
    • Learn: What are the consequences of crypto’s ongoing regulatory process?
    • Learn: Beyond the Crash and Embracing NFTs?
    • Learn: Understanding crypto bag holders and their mindset
    • Learn: Inscriptions: Just A Fad, Or A Real Threat To Bitcoin Becoming Decentralized Money?
    • Learn: How Bitcoin Ordinals Can Change the Future Of Mining?
    • Learn: What is a supernet?
    • Learn: Bitcoin Miners Celebrate 10 Years Since First ASIC, What Changed Since Then?
    • Learn: Bill Vs. CBDC – Why This US Congressman Wants To Block The Fed From Issuing A Digital Dollar?
    • Learn: Why Bitcoin Will Blow People’s Minds In 2025?
    • Learn: How the Howey Test Sheds Light on Cryptocurrency's Regulatory Gray Area
    • Learn: Cryptocurrency vs AI: A Complex Debate
    • Learn: Where the U.S. Government Went Wrong in Regulating Crypto?
    • Learn: The Nostr Privacy Paradox
    • Learn: Do algorithmic stablecoins have a future as centralized coins are under scrutiny?
    • Learn: Is Bitcoin Set To Revolutionize The Financial World With Its Superior Purchasing Power?
    • Learn: What is Shibarium, and what does it mean for Shiba Inu?
    • Learn: What is a crypto dusting attack?
    • Learn: Is the Adoption of Central Bank Digital Currencies (CBDCs) the Future?
    • Learn: How Artificial Intelligence Could Revolutionize Crypto?
    • Learn: What’s next for EU’s crypto industry as European Parliament passes MiCA?
    • Learn: Why the EU Has MiCA and the U.S. Has Securities Law Confusion?
    • Learn: Six New Projects Looking to Mitigate Bitcoin Mining’s Energy Footprint
    • Learn: Who on Crypto Twitter chose not to pay for a blue checkmark?
    • Learn: What is the wash-sale rule in Crypto?
    • Learn: What is Pepecoin and can it flip memecoins Dogecoin and Shiba Inu?
    • Learn: Can you recover stolen Bitcoin from crypto scams?
    • Learn: What the ‘anti-mining bill’ means for the crypto industry in Texas?
    • Learn: Does the US have a crypto ‘tax loophole’ problem?
    • Learn: How users can stay protected?
    • Learn: How Crypto Revolutionize Cheaper and Faster Transactions?
    • Learn: Can NFTs and CFDs be BFFs?
    • Learn: A PR expert’s tips for memecoin projects
    • Learn: Why politicians aren't convinced about the Digital Euro?
    • Learn: How A 90-Year Old TA Theory Predicted The Sudden Bitcoin Boom?
    • Learn: Social Trading Platforms and CFDs: A New Paradigm in Investment
    • Learn: How could the Chinese economic crisis impact Bitcoin and crypto?
    • Learn: How do they compare: Bitcoin IRA vs. traditional IRA?
    • Learn: Why Tokenized Assets Are Safer During a Banking Crisis?
    • TL;DR 👀
  • 🛢️Ethereum
    • Bitcoin vs Ethereum
    • What can Ethereum do?
    • What is Ether (ETH)?
    • What's Unique About ETH?
    • What are Smart Contracts?
    • Energy Consumption?
    • Ethereum Virtual Machine (EVM)
    • Pros & Cons of Smart Contracts
    • Decentralized Applications (dApps)
    • Ethereum Token Standards (ERC-20, ERC-721 and ERC-1155)
    • Evolution of Ethereum
    • How to Get Your First Ethereum
    • Learn: Next Ethereum Upgrade — Shanghai Upgrade
    • Learn: Tipping Scale for Crypto Adoption: Usability vs. Accessibility
    • Learn: Major Publicly Traded U.S. Bitcoin Miner Files For Chapter 11 – Impact On The Market?
    • Learn: 5 altcoin projects that made a real difference in 2022
    • Learn: How Tether Can Be a More Stable Stablecoin?
    • Learn: Are the Ethereum Killers Still Deadly?
    • Learn: What Ethereum Tech Trends Are Weathering the Bear Market?
    • Learn: How Ethereum’s token burns are making it a deflationary cryptocurrency?
    • Learn: A few things to know about Ethereum's Shanghai Upgrade
    • Learn: The Role of Enterprise Ethereum
    • Learn: Understanding Layer 2 Scaling Solutions for the Ethereum Network
    • Learn: The Battle of Giants: Bitcoin vs Ethereum
    • Learn: Cryptography, Smart Contracts and Distributed Networks
    • Learn: The Memecoin Grift and How It Threatens Ethereum Culture
    • Learn: What Is Ethereum’s ‘Data Availability' Problem, and Why Does It Matter?
    • TL;DR 👀
  • 👛Wallet
    • What is a Blockchain Wallet?
    • Hardware / Software Wallet
    • How to Get Your First Cryptocurrency
    • Setting up Metamask Wallet
    • Learn: How to connect the Avalanche network to MetaMask?
    • Learn: How to pass on your crypto when you die?
    • Learn: What are hierarchical deterministic (HD) crypto wallets?
    • Learn: Pros and Cons of Digital Wallets
    • Learn : How Web 3.0 Wallets Are Redefining Digital Asset Security?
    • Learn: Open source: Buzzword or real security for crypto wallets?
    • TL;DR 👀
  • 🌕New & Rising Protocols
    • Binance
    • NEAR
    • Solana
    • Fantom
    • Polygon
    • Cardano
    • Polkadot
    • Cosmos
    • Harmony
    • Cronos
    • Optimism
    • Terra
    • Who Will Win the L1 Wars?
    • Learn: New Layer 1 Blockchains Are Expanding the DeFi Ecosystem But No Eth Killers Yet
    • Learn: Is an Increased Focus on Layer-2 Scaling and ZK Technology Justified?
    • Learn: What Are the Stakes in the SEC vs. Ripple Case?
    • Learn: What is The Graph, and how does it work?
    • TL;DR 👀
  • 📈Decentralized Finance (DeFi)
    • CEX vs DEX
    • CeFi vs DeFi
    • Algorithmic Stablecoins
    • Airdrop
    • Liquidity Pool
    • Impermanent Loss
    • Swapping
    • Wrapped Token
    • Arbitrage Opportunities
    • Staking
    • Yield Farming
    • Total Value Locked (TVL)
    • Gas Fees
    • Lending & Borrowing
    • Useful Tools
    • Activity: Uniswap & Pancake Swap
    • Learn: Automated Market Makers (AMMs) in DeFi
    • Learn: Crypto Moving towards ESG: What Is Regenerative Finance (ReFi)
    • Learn: What Is dYdX? Understanding the Decentralized Crypto Exchange
    • Learn: It's A Wrap - DeFi in 2022
    • Learn: Why DeFi should expect more hacks this year?
    • Learn: The Security Challenges of DeFi
    • Learn: The Promising Future of Decentralized Social Media on Web 3.0
    • Learn: Can CBDCs, Tokenized Deposits, Stablecoins and DeFi Coexist?
    • Learn: The Increasing Popularity of DeFi and Its Potential to Disrupt Traditional Finance
    • Learn: The future of DeFi is ReFi
    • Learn: DeFi aggregation
    • TL;DR 👀
  • 🙈Non-Fungible Token (NFT)
    • What are NFTs?
    • Case Study
    • Storage
    • Who are the Players?
    • NFT Marketplace
    • NFT Useful Resources
    • Activity: Mint Your Own NFT
    • Learn: How You Can Prevent Hackers From Stealing Your NFTs?
    • Learn: What Is an NFT Floor Price?
    • Learn: Should Bored Ape buyers be legally entitled to refunds?
    • Learn: China’s view of NFTs different from rest of the world’s
    • Learn: NFTs IRL: How Digital Collectibles Are Forging Offline Experiences
    • Learn: How NFT Brands Can Cut Through The Noise
    • Learn: How Web3 disrupts the music sector?
    • Learn: Unlockable content in NFTs
    • Learn: Why Meta Matters in NFTs?
    • Learn: Should NFT Marketplaces Become Centralized?
    • Learn: Hermès vs. MetaBirkins: The NFT Case That Could Have Major Trademark and Artistic Consequence
    • Learn: What are phygital NFTs, and how do they work?
    • Learn: What is NFT ticketing and how does it work?
    • Learn: Why Solana NFT marketplace is seeing less active users?
    • Learn: NFTs and Intellectual Property
    • Learn: How AI Is Changing Artistic Creation and Challenging IP Laws?
    • Learn: The Future of NFTs: Exploring Dynamic NFTs and Their Versatile Use Cases
    • Learn: NFTs in the event and ticketing industry
    • Learn: What is NFT rarity, and how to calculate it?
    • Learn: What happens to your NFTs when you die?
    • Learn: Dogecoin-Like Spike in Milady NFTs After Elon Musk’s Tweet, But Will It Last?
    • Learn: What are NFT royalties, and how do they work?
    • Learn: How developers aim to store crypto inside NFTs?
    • Learn: Generative Art NFTs: What Are They & Why Are They So Popular?
    • TL;DR 👀
  • 💗Metaverse
    • What is the Metaverse?
    • Metaverse Economy
    • Metaverse Companies
    • GameFi
    • Learn: Are We in the Metaverse Yet?
    • Learn: Can the Metaverse exist without blockchain?
    • Learn: Can the Metaverse Facilitate Sustainable Growth of Defi Systems?
    • Learn: What is the role of biometrics in the metaverse?
    • Learn: Can metaverse be the future court?
    • Learn: Metaverse Fashion Is on the Rise, but for Whom?
    • Learn: Sustainability in the Metaverse: Challenges and Opportunities
    • Learn: How To Build A Responsible Metaverse?
    • Learn: What is a VTuber, and how do you become one?
    • Learn: How proof-of-identity provides human experiences?
    • Learn: The “Metaverse” Next Frontier for Business: Impact And Challenges
    • Learn: The 5 Biggest Misconceptions About The Metaverse
    • Learn: Why culture and ownership are critical to the metaverse?
    • TL;DR 👀
  • 👾Career in Web3 (coming soon)
    • Developers
    • Moderators
    • Community Managers
    • UI/ UX Designers
    • Digital Fashion Designers
  • 🌱Sustainability (Coming Soon)
    • Industry Effort
    • Co-author
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  • What is a hard fork?
  • What is a soft fork?
  • Hard forks vs soft forks
  • Reasons for a hard fork
  • Notable hard fork examples
  1. Bitcoin

What are Hard Forks and Soft Forks

PreviousLearn: What is bitcoin mining?NextWhat is SegWit and the Lightning Network

Last updated 2 years ago

What is a hard fork?

A hard fork, as it relates to technology, is a radical change to a network's protocol that makes previously invalid blocks and transactions valid, or vice-versa. A hard fork requires all nodes or users to upgrade to the latest version of the protocol software.

Forks may be initiated by developers or members of a crypto community who grow dissatisfied with functionalities offered by existing blockchain implementations. They may also emerge as a way to crowdsource funding for new technology projects or offerings.

What is a soft fork?

Hard forks vs soft forks

Hard forks and soft forks are essentially the same in the sense that when a cryptocurrency platform's existing code is changed, an old version remains on the network while the new version is created.

With a soft fork, only one blockchain will remain valid as users adopt the update. Whereas with a hard fork, both the old and new blockchains exist side by side, which means that the software must be updated to work by the new rules. Both forks create a split, but a hard fork creates two blockchains while a soft fork maintains the original blockchain.

Considering the differences in security between hard and soft forks, almost all users and developers call for a hard fork, even when a soft fork seems like it could do the job. Overhauling the blocks in a blockchain requires a tremendous amount of computing power, but the privacy gained from a hard fork makes more sense than using a soft fork.

Reasons for a hard fork

If hard forks can drastically reduce the security of a blockchain, why do they happen at all? The answer is simple: hard forks are upgrades that are necessary to improve the network as blockchain technology continues to evolve. There are several reasons to introduce a hard fork, including:

  • Adding functionality

  • Correcting security risks

  • Resolving a disagreement within a cryptocurrency’s community

  • Reversing transactions on the blockchain

Hard forks can also happen by accident. Often, these incidents are swiftly resolved and those that were no longer in consensus with the main blockchain fall back and adhere to it after realizing what had happened.

Similarly, hard forks adding functionalities and upgrading the network usually allow those who fall out of consensus to rejoin the main chain.

Notable hard fork examples

There are numerous historical examples of hard forks in the cryptocurrency world, and not all of them happened with the Bitcoin blockchain.

Here are some of the most popular hard forks in history and how they influenced the industry:

SegWit2x and Bitcoin Cash

SegWit2x was implemented as a result of the controversial New York Agreement reached on May 23, 2017. The agreement saw that a number of Bitcoin business owners and miners representing over 85% of the network’s hash rate decided the future of BTC behind closed doors.

SegWit would be implemented through a soft fork, while the block size limit would be implemented through a hard fork later on. The proposal was controversial because it did not include any developer behind the main codebase of Bitcoin, Bitcoin Core, and was seen as a centralizing force — a group of businesses deciding the fate of the network without miners and nodes reaching consensus. The agreement arose after years of debate on scaling Bitcoin.

Small block proponents argued that larger blocks would make it harder to host a full node, potentially centralizing the cryptocurrency. Those who supported larger blocks argued that Bitcoin’s rising transaction fees would harm its growth and price some users out of the network.

On Bitcoin’s network, user-activated soft forks are possible. In this scenario, wallet operators, exchanges and other businesses running full nodes can move to a new version of the blockchain that will have an activation point in the future, forcing miners on a network to “fall in line” and activate the new rules. If they don’t, the network could end up splitting.

The Bitcoin Cash blockchain was created with an eight MB block size that has since increased to 32 MB. To this day, many Bitcoin Cash supporters maintain that its low transaction fees will help it scale and bank the unbanked, believing BTC will be left behind because of its larger transaction fees.

The Bitcoin Cash hard fork saw the possibility of a hard fork entering the limelight, and shortly after, numerous other Bitcoin forks were created. These include Bitcoin Gold (BTG), Bitcoin Diamond (BTCD) and others.

The DAO Hack

At the time, the DAO raised $150 million worth of ETH in one of the earliest crowdfunding efforts in crypto, before the initial coin offering (ICO) craze of 2017. It was essentially an early iteration of the decentralized governance models DeFi protocols use, wherein token holders vote on the future of the protocol.

A debate within the Ethereum community ensued, as everyone scrambled to figure out how to respond to the attack. Initially, Ethereum founder Vitalik Buterin proposed a soft fork that would blacklist the attacker’s address and prevent them from moving the funds.

The attacker, or someone posing as them –– responded to the community claiming the funds had been obtained in a legal way and in accordance to the smart contract’s rules. They claimed they were ready to take legal action against anyone who tried to seize the funds. Tensions rose as the attacker said they would thwart soft fork attempts by bribing ETH miners with the funds.

Debate once again ensued until a hard fork was proposed. The hard fork was ultimately implemented and it rolled back the Ethereum network’s history to before the DAO attack occurred, reallocating the stolen funds to a smart contract where investors could withdraw their funds.

Hashrate Wars: ABC vs. SV

Cryptocurrency exchanges and other businesses revealed that they would attribute the BCH ticker to the blockchain that came out on top. Some mining pools diverted all of their resources to the hash wars, with Bitcoin Cash ABC ultimately having the majority of the hash rate and fending off any 51% attack attempts. It later claimed the BCH ticker on exchanges and other services, with the other network choosing BSV as its ticker.

Source

In technology, a soft fork is a change to the software protocol where only previously valid transaction blocks are made invalid. Because old nodes will recognize the new blocks as valid, a soft fork is backwards-compatible. This kind of fork requires only a majority of the miners to upgrade to enforce the new rules, as opposed to a that requires all nodes to upgrade and agree on the new version.

designed to help Bitcoin scale. It was set to implement Segregated Witness (SegWit) and increase the block size limit from one MB to two MB on the cryptocurrency’s network.

Bitcoin users at the time to stop a precedent from being set in response to the closed-door meeting dictating the future of Bitcoin. They called for theBitcoin Improvement Proposal (BIP) 148, which sought to implement SegWit on the Bitcoin Network and argued that SegWit2x was a contentious hard fork that made the network vulnerable to a replay attack. It was released in March 2017 and was set to be implemented on August 1, 2017. Fearing that the SegWit2x plan would not be fulfilled and seeing the community support SegWit, some big-block supporters decided to fork the Bitcoin blockchain on August 1, 2017. The result was the creation of Bitcoin Cash (). Its supporters did not see the split as the creation of a rival network, but rather as the continuation of Satoshi Nakamoto’s original vision.

was associated withthe decentralized autonomous organization (DAO) that was launched in 2016 on the Ethereum network. Ethereum runs a set of smart contracts, which are essentially chunks of code that automatically execute whenever a set of criteria has been met. These contracts make money programmable and are behind decentralized applications (dApps).

After its launch, the DAO was hacked for $60 million worth of ETH from 11,000 investors. At the time,, so around 14% of all circulating Ether was invested in the DAO, and the hack was a major blow to confidence in the network.

The move was extremely controversial, and in the eyes of some, affected the blockchain’s censorship resistance and immutability: investors were, in their eyes, being bailed out. Those who saw things this way rejected the hard fork and supported an earlier version of the network, now known as Ethereum Classic ().

Bitcoin Cash was created through a hard fork of the Bitcoin blockchain in August 2017, and would later split into two networks as groups within its community feuded. On one side, there was Bitcoin Cash ABC (BCHA), a development team trying to improve the technology behind it. On the other side, there was Bitcoin Cash SV (), a team supported by self-proclaimed “Satoshi Nakamoto” Craig Wright, trying to raise the block size from 32 MB to 128 MB.

At block 556,767, the blockchain split in two, and the. Miners on both sides deployed every resource they could to have a hash-rate advantage over the other. Many were calling for a 51% attack on the other network to reorganize its blocks, so its proponents would be forced to move to their side.

1) . By Updated May 25, 2022. Reviewed by . Fact checked by 2) . By Updated October 23, 2021. Reviewed by . Fact checked by 3) 4) Cointelegraph.

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https://ethereumclassic.org/knowledge/roadmap
https://cointelegraph.com/blockchain-for-beginners/soft-fork-vs-hard-fork-differences-explained
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