Overview
A hard fork is a permanent divergence from the previous version of the blockchain. If some nodes continue to run the old software while others move to the new one, the chain splits into two separate networks.
Reasons for Hard Forks
- Upgrades: Adding new features or improving security.
- Disagreements: Community splits over the direction of the project (e.g., Bitcoin vs. Bitcoin Cash).
- Recovery: Reversing the effects of a major hack (e.g., the Ethereum DAO fork).
Result
Users often receive an equivalent amount of the new coin on the forked chain if they held the original coin at the time of the split.