Hard Fork and Soft Fork in blockchain

Hard fork and soft fork are the protocol upgrade mechanism in blockchain. Hard fork creates an incompatibility between the previous version and the latest version on software. There is always a possibility of split of blockchain (like Ethereum Classic). However, it is debatable, if they are preferred upgrade mechanism for blockchain.

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Fig: Hard Fork Vs. Soft Fork

There are also two sub-types of hard forks: strictly expanding hard forks, which strictly expand the set of transactions that is valid, and so effectively the old rules are a soft fork with respect to the new rules, and bilateral hard forks, where the two rulesets are incompatible both ways.

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Fig: Venn diagram to illustrate the fork types

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