If you have been involved with cryptocurrencies for a while, you have probably read about a hard fork and soft fork. But what is the difference between the two? In this article, we are going to tell you more about hard forks and soft forks. If a fork arises during development, this means that the source code of an existing application is used by a new party and is subsequently modified. As an example, you can look at what Bitcoin Cash has done with Bitcoin.
What is a soft fork
You often see that with a soft fork, not much is changed in the code of the program. Only more rules are being drawn up for the use of the code. At first there are no rules about, for example, the limits of the blocks. But after the soft fork there is a limit of a maximum of 1 MB. The reason that softforks are implemented is because some developers of a project disagree with the decisions and then move on to their own part of the project.
A hard orc goes just a step further than a soft fork. The difference is that a hard fork becomes a blockchain divided between two parties and the second party continues under a new name. You often see that the old variant of the coin continues to continue under the same code. But with the new variant, the blockchain will be largely adapted. A hard fork usually occurs when two parties of developers cannot agree with each other and a split is necessary.
Are forks good or bad?
You probably wonder what the pros and cons of forks are. In some cases, a soft fork or hard fork can work very well and both variants of the coin do better. But in some cases, one of the two lags very far behind and the other just continues to develop well. Still, a fork can be a nice new investment. However, it is important that you find out what the differences are. In many cases, with a hard fork when you have coins from one currency, you will also receive the same number of coins from the new currency. That means free money. An example of a hard fork is the Bitcoin Cash SV, which has emerged from Bitcoin Cash. Most people sell these directly, but in some cases it's a good idea to keep them. It could just become a new top 10 coin.