What is Hard Fork

A hard fork is a permanent, backward-incompatible change to a blockchain's protocol rules that is significant enough to require all nodes to upgrade their software and when the community disagrees on the upgrade, creates a permanent split into two separate, independent blockchain networks.

THE TECHNICAL MECHANICS

In a blockchain network, all nodes must agree on the same protocol rules to maintain consensus. When a hard fork implements new rules that are incompatible with the old rules: Upgraded nodes follow the new rules and reject blocks created under old rules. Non-upgraded nodes follow old rules and reject blocks created under new rules. If the community splits with some nodes upgrading and some staying on the old software both chains continue producing blocks from the fork point onward, with identical history up to the fork block but diverging from that point.

THE DISTRIBUTION OF FORKED COINSA

critical implication for holders: if you own coins on the original chain at the block where a hard fork occurs, you typically hold equal coins on both resulting chains. Your private key controls both. When Bitcoin Cash forked from Bitcoin at block 478,558 in August 2017, every Bitcoin holder received an equivalent amount of BCH. This "free money" aspect of hard forks has led to communities sometimes engineering controversial forks to extract value.

FAMOUS HARD FORKS

Bitcoin Cash (BCH, August 2017): The most significant Bitcoin hard fork. The Bitcoin community split over how to scale the network one faction wanted to increase the block size from 1MB to 8MB, the other preferred the SegWit off-chain scaling approach. After years of debate (the "Blocksize Wars"), a hard fork created Bitcoin Cash with larger blocks. Bitcoin remained the dominant chain.
Ethereum / Ethereum Classic (ETC, July 2016): Following the DAO hack where $60 million in ETH was stolen via a smart contract exploit, Ethereum's core developers proposed a hard fork to reverse the hack and restore stolen funds to investors. This violated blockchain's immutability principle "code is law." Most of the community accepted the fork; a minority maintained the original chain as Ethereum Classic.
Bitcoin SV (BSV, November 2018): A further hard fork from Bitcoin Cash, led by Craig Wright (who controversially claims to be Satoshi Nakamoto), creating Bitcoin SV with even larger blocks.

Terms in addition to the Hard Fork

Blockchain

A blockchain is a subset of a distributed database. The Bitcoin inventors originally prototyped the system in 2008. This modern database is made up of separate blocks that are connected together in a chronological chain. Blockchains may be used to store a wide range of data types. It has mostly been utilized as a public ledger for bitcoin transactions to date. A peer-to-peer network comprised of independent nodes uses a consensus process to ensure the blockchain's security and legitimacy. Each node in the network keeps a public and immutable copy of the data.

2 Factor Authentication (2FA)

2 Factor Authentication is a security measure with two layers. It is used by the majority of cryptocurrency exchanges. To log in, you must provide not only a password, but also a code obtained, for example, from the Google authenticator.

Airdrop

An airdrop is a method of distributing coins. End users can typically obtain coins for free or in exchange for doing a small task, such as subscribing to a newsletter, sending a tweet, or inviting others via a personal affiliate link. Cryptocurrency airdrops — the act of depositing cryptocurrency into public crypto wallets — are utilized as a marketing, liquidity creation, and network bootstrapping technique for many different types of blockchain initiatives.

Altcoin

Altcoin - "alternative coin" - is any kind of digital currency other than Bitcoin. Since the launch of Bitcoin, the world's first digital currency, many altcoins (as well as supporting blockchains) have been created. Altcoin digital currencies share many similarities to Bitcoin, but consistently and have significant differences. There are about 20,000 altcoins, and this number is expected to grow significantly in the coming years. Altcoins often develop Bitcoin features. Ethereum, currently the most widely used blockchain, supports digital contracts and separate applications where Bitcoin does not. Altcoins are also often created to cater to the needs of different users. The Litecoin blockchain, for example, can process payments quarterly for the duration of Bitcoin.

Cold Storage

Cold storage is the way to store cryptocurrency offline. The word refers to the use of offline wallets that are not connected to the internet. Cold storage is the most secure way to keep cryptocurrencies since an offline currency becomes less likely to be hacked and stolen. Paper wallets, printed renditions of private keys, and offline hardware and software wallets are all examples of cold storage.