A fork is a divergence in a blockchain network that occurs when the protocol rules change, requiring node operators to upgrade their software.
There are two main types of forks: soft forks and hard forks. Both create a split in the transaction history of the blockchain, but they differ in compatibility and network impact.
A hard fork is a protocol change that is not backward compatible. Every node must upgrade to the latest version to remain active on the network. If consensus on the new rules is not unanimous, the blockchain can divide into two distinct paths, each progressing independently with its own ledger from the point of division onward. Hard forks may result in the creation of a new cryptocurrency if the split is permanent.
Feature | Soft fork | Hard fork |
Compatibility | Backward-compatible | Not backward-compatible |
Old Nodes | Can still validate blocks | Updated network will reject them |
Chain split | Chain remains unified | Permanent split in chain is often created |
Example | Segwit (soft forked from Bitcoin) | Bitcoin Cash (hard forked from Bitcoin) |
Forks can have a significant impact on blockchain networks and their users. They can lead to the creation of new cryptocurrencies, affect the value of existing tokens, and alter the governance structure of a network.
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