In the cryptocurrency world, hard forks and airdrops are common. Understanding these processes helps investors and users manage changes in blockchain networks.
What Is a Hard Fork?
A hard fork occurs when a blockchain splits into two distinct networks due to modifications in the blockchain’s code. These changes are proposed by developers, network users, or the community to enhance functionality, security, or speed. If the community is not in complete agreement, the network can split. An example is the 2017 split of Bitcoin Cash from Bitcoin.
What Is an Airdrop?
An airdrop refers to the free distribution of new cryptocurrency into users' wallets. This is done to promote the project and attract new users. Unlike hard forks, airdrops do not involve a blockchain split. Developers send new tokens to existing wallet holders.
Key Differences Between Hard Forks and Airdrops
Hard forks and airdrops introduce new cryptocurrencies in different ways. Hard forks are associated with blockchain changes, while airdrops are a marketing tool for distributing new tokens. For instance, Bitcoin Cash is a result of a hard fork, whereas UniSwap was distributed via an airdrop.
Hard forks and airdrops play crucial roles in the development of crypto networks. Understanding their features helps investors make informed decisions.
