What is a Fork?
Every digital currency is based on the system of the Blockchain. This is a public ledger of all transactions stored in blocks created from the Genesis block up to the very current block. This way, anyone may verify the transactions to ensure they’re legit. Each currency has a single blockchain comprising a single ledger to follow so it needs to be an entirely trusted system without any flaws.
There are two different types of forks. An accidental fork can occur if over 51% of the wallets or nodes start to create their own blockchain, and go that route. This can be because some nodes have gone bad in a sense thereby passing on this information to other nodes on the network until eventually the wallets take that route.
It can also happens when a coin’s developers make a mistake when updating the coin’s code. If the update isn’t compatible with the current code on the network, new blocks may not be recognized by previous versions and the blockchain forks. This creates two different blockchains, one as intended based on the original code, and one on the newer version.
A fork can also be brought about by way of an attack to disrupt the community and destroy trust in the coin.
What is a hard fork?
A hard fork, on the other hand, is implemented by design. This can be to correct the original forking issues or when new features are to be introduced to the coin and network. When a hard fork occurs, the old blockchain is essentially abandoned, and everyone migrates to the new one. This is why it is very important to update wallets and nodes in time, before any announced hard fork date and time.
Good and bad forks
An accidental or malicious fork is a difficult and testing time for all those involved in the coin - from developers, support staff, and of course the end users being the holders of the coin.
A hard fork on the other hand can bring about interesting new ideas and exciting features.
It is therefore of utmost importance to pay attention to the community to stay updated on whether the coin is experiencing a fork whether determined or not, and what you’ll need to do about it to protect your coins.
Generally it is a bad idea to accept a coin for goods and services during the period of a fork, as the risk of losing coins received is high.