A specific form of a fork (a cryptocurrency fork) which that arises when the developers of a blockchain decide to make changes to the code so that it will end up with lasting incompatibilities between the older and newer version, breaking the forward compatibility of crypto assets. The new version will no longer be backward-compatible with earlier blocks. As a result, the blockchain divides into two chains: the original blockchain and new version that follows the new set of rules (those defined under the new version).

Hard forking creates an entirely new cryptocurrency, where new coins (such as Bitcoin cash, Bitcoin gold) evolve out of  the original block chain. Forking occurs for many reasons including addition of functionality, resolving a disagreement  as to the direction of evolution, and addressing certain security risks. In other words, hard forks usually result from bugs/ errors in the blockchain or from intentional intervention of the cryptocurrency community.

A hard fork is an event involving a split of a blockchain into two separate blockchains that will function parallel with each other, each under different rules and parameters as to a previous chain. Transaction history and parameters change after the hard fork, where the two networks dissociate from one another after the hard fork, and evolution of each network will not be reflected on the other. Hard forks are major events that lead to modification of a certain characteristic of a project (such as the block size, rewards and hard cap, etc.)

Contrary to a soft fork, a hard fork requires that all nodes in the network upgrade to the new version of the code after the split. A soft fork involves a change to the software protocol under which only previously valid blocks/ transactions are invalidated, and hence it is backward-compatible. A soft fork is a minor change to a blockchain protocol.