Hard Forks and Replay Protection
This article aims to explain Hard Forks and Replay Protection in the context of the recent Bitcoin Cash Hard Fork.
What defines a specific Blockchain Network is the set of "hard" rules that govern it. Bitcoin (BTC), for example, has a fixed supply of 21 Million BTC, uses a 1 MegaByte limit for its block size, and has a special algorithm to adjust its mining difficulty every 2016 blocks. These are only a few of its hard-rules that cannot be altered.
Since Bitcoin is defined by these "hard" rules (also known as Consensus Rules), changing even just one of them would create a completely new Blockchain: We call this a Hard Fork.
The term "Fork" can be easily visualized if you consider that both chains share a single transaction history and balance history until the fork, at which point they become separate albeit sister chains.
When a Hard Fork takes place, your addresses holding the original asset now contain two different assets, governed by different rules. This is what happened on the 1st of August 2017 when Bitcoin Cash (BCH) was forked out of Bitcoin (BTC). Another example of this is Ethereum (ETH) and Ethereum Classic (ETC).
This usually happens when teams behind the development of a Blockchain Protocol disagree on its most fundamental hard elements.
Hard Forks can occur in 2 ways:
- Both chains (Blockchains) "agree to disagree" and develop their separate projects with different names. Both projects are happy to go their separate ways, so both protocols will build and add to their chains something called Replay Protection, this prevents transactions on one chain, to be re-broadcasted onto the other. We call this a Replay Attack.
- Both chains claim to be the "real and original" Blockchain, in which case things are more complicated. More recently, Bitcoin Cash (BCH) itself had a hard fork, splitting it into Bitcoin Cash and Bitcoin SV (BSV). This was the second type of hard Fork and both projects were, for a time, fighting and claiming to be the legitimate chain. More importantly, though, only one side implemented Replay Protection putting people's funds at risk of a Replay Attack.
The Exodus Developer Team recently managed to implement Replay Protection to Split Bitcoin Cash (BCH) and Bitcoin SV (BSV) on the wallet. After this process is completed, those holding BCH on their Exodus wallets will be able to send and exchange both assets independently, without risking a Replay Attack.
If you want to learn even more about Hard Forks, this is a great article to read next.