Hard Fork

Definition ∞ A hard fork is a permanent divergence in a blockchain’s protocol, creating two separate, incompatible chains. This occurs when a network upgrade introduces new rules that are not backward-compatible with the old software, requiring all participants to update their client software. Nodes that do not upgrade continue to operate on the old chain, while upgraded nodes follow the new chain. Hard forks are typically implemented to add new functionalities, address critical security vulnerabilities, or reverse transactions after a major exploit.
Context ∞ Hard forks are significant events in crypto news, often preceding major protocol upgrades like Ethereum’s Merge or contentious community disagreements. The discussions center on network stability, potential chain splits, and the economic implications for digital asset holders. Future considerations involve strategies for smoother upgrade processes and enhanced community consensus mechanisms to mitigate fragmentation risks.