Understanding Hardforks in Blockchain

To understand hardforks we first have to explain what it is.

Consider a major update to a blockchain that creates a permanent split when the new version is not backward-compatible. This split results in users now needing to upgrade to continue on the new version, but If some users refuses to upgrade, 2 new blockchains emerge.

There are only 2 types of hardforks in blockchain

Planned Hardfork

A scheduled upgrade agreed upon by the community (e.g., Ethereum’s Istanbul upgrade).

Contentious Hardfork

A disagreement causes the blockchain to split into two separate networks (e.g., Bitcoin Cash vs. Bitcoin).

Let's look into the possible reasons why a hardfork would occur

*Fixing security issues or breaches like hacks,etc. (We'll delph into an example in a minute.)

*Adding new features to help transactions or smart contracts clear faster.

*Resolving disagreements in how the blockchain should function between shareholders.

Hacker causes need to use Hardfork in 2016 - DAO Hack Fix

A hacker who stole $60M in ETH from a smart contract, left developers in total shock and disbelief.

Without much options to retrieve the stolen ETH, the only option was to implement a hardfork to reverse the hack crime.

The result was Ethereum (ETH) and Ethereum Classic (ETC) were born.

Bitcoin Cash (2017) – Block size hardfork

A good example to point out is when Bitcoin had slow transactions due to a small block size back in 2017.

A faction of the community increased the block size, creating Bitcoin Cash (BCH), hoping this would help but the results was not what they expected.

The outcome was that Bitcoin and Bitcoin Cash became separate blockchains entirely.

Benefits of a Hardfork

✅ Improves Security – Fixes vulnerabilities.

✅ Enhances Performance – Faster transactions, better scalability.

✅ Empowers Users – The community has a say in changes.

The downsides of a Hardfork

❌ Splits the Community – Can weaken blockchain adoption.

❌ Causes Confusion – Multiple versions of the same blockchain.

❌ Security Risks – Poorly planned forks can introduce bugs.

What do you think about hardforks? Do you think hardforks can be good or bad, depending on the situation or not ?