When people talk about possible changes to how Bitcoin works they sometimes say a particular change would require a hard fork. What does that mean? Can a hard fork cause problems?
Simply put, a so-called hard fork is a change of the Bitcoin protocol that is not backwards-compatible; i.e., older client versions would not accept blocks created by the updated client, considering them invalid. Obviously, this can create a blockchain fork when nodes running the new version create a separate blockchain incompatible with the older software.
For potential future changes that would require a hard fork, see the associated wiki page.