fork hard

What Is a Hard Fork?

A hard fork is a fundamental change to the “rules of the game” on a blockchain that creates a new set of rules incompatible with the old version. Nodes running the old software remain on the original chain, while upgraded nodes operate on the new one, often resulting in two independent, parallel blockchains. Most hard forks are coordinated upgrades by the community, but some lead to lasting splits.

When blockchain software is upgraded with new rules, nodes that do not upgrade will reject blocks or transactions created under the new rules as “invalid,” causing a split in network consensus. Participants—such as miners or validators, who are responsible for block production in Proof of Work and Proof of Stake systems, respectively—choose which set of rules to follow.

Why Do Hard Forks Happen?

Hard forks are usually driven by technical, security, or governance needs. Common reasons include patching critical vulnerabilities, expanding functionality, adjusting transaction fees or block parameters, or resolving disagreements over the project’s direction or core values.

For instance, in response to security incidents, developers may propose new rules to prevent further exploitation of vulnerabilities. To overcome performance bottlenecks, protocols might change transaction formats or execution environments. When communities disagree over whether blockchain history should be altered, a hard fork can lead to two blockchains coexisting long-term.

How Do Hard Forks Work?

The principle behind a hard fork is a protocol change that is not backward-compatible. This means that nodes running the old software cannot validate blocks or transactions created under the new rules, leading to a consensus split.

You can think of a blockchain as a ledger written by everyone following the same rulebook. Once that rulebook is revised, those using the old version can’t interpret entries made using the new one; if both groups continue recording transactions, two separate ledgers are created and maintained independently. Technically, new chains often modify elements such as transaction formats, scripting or virtual machine rules, block size limits, or chain IDs, causing old nodes to treat new data as invalid.

How Does a Hard Fork Affect User Assets?

During a potential chain-splitting hard fork, users may find themselves with assets on both chains since both chains diverge from a common historical state. This process typically relies on a “snapshot,” which records all account balances at a specific block height as the basis for asset allocation after the split.

If the hard fork is merely a coordinated upgrade without creating a new chain, user assets continue seamlessly on the original chain—users just need to wait for wallets and applications to complete compatibility updates. If a new chain emerges, token symbols, stablecoin support, DeFi protocols, and NFT marketplaces may develop differently on each chain. Note: A snapshot refers to the recorded balance at a specific time; an airdrop is when new assets are distributed to eligible addresses on the new chain.

For asset management, users should pay attention to which exchanges and wallets support each chain. Transfers and trading may be suspended during the fork window, and cross-chain bridges or lending positions could face liquidation or price divergence risks. Some forks introduce “replay protection”—ensuring that a transaction is valid only on one chain—to prevent replay attacks, where the same signature could be accepted by both chains.

How Does Gate Handle Hard Forks?

Exchanges typically issue risk notices and outline their plans in advance. At Gate, for major hard forks, the standard procedure includes announcing the snapshot time ahead of schedule, temporarily suspending deposits and withdrawals for affected tokens, evaluating whether to support asset mapping or airdrops for new chains based on technical and security assessments, and resuming services after wallet upgrades are complete.

1. The platform releases an announcement detailing the snapshot block height and time, whether it will support the fork, and any potential impacts.
2. Deposits and withdrawals are temporarily suspended to prevent asset anomalies or replay risks caused by blockchain uncertainty during the fork.
3. Node and wallet upgrades are tested to ensure correct transaction processing and balance accuracy.
4. After evaluation, Gate decides whether to distribute new chain assets or open trading pairs and informs users about subsequent steps and potential risks.

Risk reminder: All on-chain activity during a fork is subject to confirmation delays and price volatility. Users should exercise caution and rely solely on official Gate announcements.

What Is the Difference Between Hard Forks and Soft Forks?

A hard fork is an incompatible upgrade—old nodes cannot validate blocks produced under the new rules. In contrast, a soft fork is a backward-compatible upgrade—old nodes still recognize new blocks as valid but may not support new features.

Think of traffic laws: a hard fork is like completely changing driving regulations so that old vehicles can no longer use the roads; a soft fork is like adding new lanes or speed limits—old vehicles can still drive but cannot access new features. Historically, Bitcoin’s Segregated Witness (SegWit) upgrade in 2017 was implemented via soft fork, while Bitcoin Cash was created that same year through a hard fork.

Notable Examples of Hard Forks

Several well-known examples illustrate hard forks: In 2016, Ethereum underwent a hard fork following The DAO incident—the main community chose to “roll back stolen funds,” creating today’s Ethereum (ETH), while those who opposed any rollback continued as Ethereum Classic (ETC). In 2017, disagreements within the Bitcoin community over scalability led to the creation of Bitcoin Cash (BCH) via hard fork.

It’s also important to note that many Ethereum network upgrades (such as Istanbul and London) were technically hard forks but did not result in permanent splits due to strong community coordination. This demonstrates that not all hard forks lead to persistent divergence—the outcome depends on governance and consensus.

What Should Users Do During a Hard Fork?

1. Monitor official communications and exchange announcements for snapshot times and support policies; avoid frequent transactions during the fork window.
2. Back up your private keys and seed phrases, and update your wallet to a version compatible with the new rules. Never enter your private key on untrusted websites—it’s your key to your assets.
3. Check for replay risks and protection measures. If the new chain implements replay protection, transfers are safer; without protection, the same transaction could be valid on both chains after the fork.
4. Assess your holdings and contract exposure. Leveraged positions, loans, staking, and liquidity pools may experience price volatility or liquidation during a fork—consider minimizing complex operations.
5. Beware of phishing scams and fake airdrops. Only trust official channels from exchanges or project teams for airdrop information, and verify contract addresses and chain IDs.

Trends and Risks of Hard Forks

As of 2024, mature public blockchains tend to use coordinated hard forks for scheduled upgrades—delivering planned non-backward-compatible changes while minimizing chain splits. However, emerging ecosystems or those with significant governance disputes remain at risk for long-term splits.

Key risks include replay attacks, ecosystem fragmentation (with applications and liquidity split across chains), inconsistent stablecoin or oracle support, failed or delayed transactions during migration windows, and scams or fake announcements. Mitigation strategies include clear governance processes, thorough testing, replay protection mechanisms, and synchronized upgrades by exchanges and infrastructure providers.

Key Takeaways on Hard Forks

A hard fork is an incompatible protocol upgrade that can create parallel blockchains. Users should focus on official announcements, snapshot timing, wallet upgrades, replay protection measures, and how exchanges like Gate handle asset mapping and service support. Most hard forks are coordinated upgrades that do not result in lasting splits—but during the fork window, limit activity and stay vigilant against risks and scams.

FAQ

After a hard fork, will I have coins on both chains?

Yes. During a hard fork, your coins on the original chain remain intact while you also receive an equivalent amount on the new chain. For example, when BTC hard-forked into BCH, users holding 1 BTC received 1 BCH on the new chain as well—as long as their coins were stored in wallets or exchanges (like Gate) supporting both chains. If you self-custody your coins, you may need extra steps to claim your new assets.

How do coin prices typically fluctuate before and after a hard fork?

Prices usually rise before a hard fork as markets anticipate value in the new coin; after the split, prices for the newly created coin can surge or crash depending on community support and exchange listings. These fluctuations carry risk—newcomers should avoid frequent trading around forks. For timing and policies regarding specific forks, consult official announcements from platforms like Gate.

If my coins are held on an exchange during a hard fork, will I automatically receive the new coins?

It depends on the exchange’s policy. Most reputable exchanges (like Gate) will automatically credit users with new coins after a hard fork but distribution may take several days or even weeks. Always check official announcements in advance—do not assume every exchange will support every forked asset.

Are coins created by a hard fork valuable?

The value of newly created coins depends on community consensus and future adoption. Some coins created from BTC forks (like BCH or BSV) still hold market value today; many others have become worthless over time. Since value is volatile and uncertain, avoid speculative buying before researching liquidity and ecosystem support—platforms like Gate provide helpful data points.

What if my coins are in cold storage during a hard fork?

Coins stored in cold wallets exist simultaneously on both chains after a hard fork—but you’ll need wallet software compatible with the new chain to import your private key and access your new assets. This process carries operational risk; if you’re not familiar with it, consider moving your assets to an exchange like Gate before the fork so they can handle asset allocation securely for you.