Hard Fork

A hard fork is a fundamental change to a blockchain’s rules that is not backward compatible. This means that after a hard fork, nodes running the old software and nodes running the new software can no longer agree on which blocks are valid. A hard fork either results in everyone upgrading together, or in the blockchain permanently splitting into two separate chains.

Hard forks can happen for planned protocol upgrades where the community agrees in advance, or for contentious splits reflecting deep disagreements. The most famous example is the split between Ethereum (ETH) and Ethereum Classic (ETC) in 2016, after the community disagreed about whether to reverse transactions from a major hack. When a hard fork splits a chain, anyone who held cryptocurrency on the original chain typically receives an equal amount on both new chains — like suddenly having two keys to two different bank accounts. The value of each chain after the split depends on which one the community and exchanges choose to support.

Example: Imagine a country’s legal system undergoing a constitutional change so significant that the old legal code and the new one are completely incompatible. A hard fork is that kind of break — you either update to the new rules or you are now living under a different system entirely.