SINGAPORE — In the first part of Don’t skip crypto basics before you invest we covered elementary, but technical jargon related to cryptocurrency.
In part two, we go through seven key crypto technical terms you need to know.
1. Hard Fork
A hard fork is a radical update to the blockchain that can make previously unvalidated blocks valid or previously validated blocks invalid.
A hard fork requires all nodes or users to upgrade to the latest version of the protocol software. It can result in a new cryptocurrency being created. One well-known example would be Bitcoin and Bitcoin Cash.
Forks may be initiated by developers or members of a crypto community who grow dissatisfied with functionalities offered by existing blockchain implementations.
To understand what a hard fork is, it’s essential to first understand blockchain technology. A blockchain is essentially a chain made out of blocks of data that work as a digital ledger in which each new block is only valid after the previous one has been confirmed by the network validators.
Data on the blockchain can be traced all the way back to the first-ever transaction on the network. This