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Bitcoin Explained - A Short Guide to Bitcoin Forks




What is it? A hard fork is a software upgrade that introduces a new rule to the network that isn't compatible with the older software. You can think of a hard fork as an expansion of the rules. (A new rule that allows block size to be 2MB instead of 1MB would require a hard fork).
What happens? Nodes that continue running the old version of the software will see the new transactions as invalid. So, to switch over to the new chain and to continue to mine valid blocks, all of the nodes in the network need to upgrade to the new rules.
What can go wrong? The problem comes when some sort of political impasse arises, and a portion of the community decides to stick by the old rules no matter what. The hash rate, or network computing power, behind the old chain is irrelevant. What matters is that its data (and ruleset) is still perceived to have value, meaning miners still want to mine a chain and developers still want to support it.
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Item Reviewed: Bitcoin Explained - A Short Guide to Bitcoin Forks Rating: 5 Reviewed By: PRASHANT ENTERPRISES