A blockchain fork is a change made to a blockchain protocol that splits the blockchain in two.

There are two types of forks: hard and soft. Hard forks change the fundamental rules of how the blockchain works, such as how new data is added and confirmed. Meanwhile, soft forks improve the blockchain’s features but do not change its fundamental rules.

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What is a hard fork?

A hard fork is a major change to the blockchain that makes the previous version completely incompatible with the new one. The result is completely separate chains: the old one that follows the old protocol, or set of rules, and the new one that follows the new protocol. All devices that want to use the new protocol need to upgrade to the new chain and all the applications using the old version need to be updated to remain functional.

Examples of hard forks include:

• The Ethereum Merge in 2022 which switched the network consensus mechanism from proof-of-work to proof-of-stake for increased efficiency and reduced energy usage.
• The creation of Bitcoin Cash in 2017 to solve the problem of Bitcoin’s limited transaction speed by increasing the number of transactions in every “block,” or batch of data. Since then, transactions made through the Bitcoin Cash Network use Bitcoin Cash (BCH) instead of Bitcoin (BTC).

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What is a soft fork?

A soft fork is a minor change in the blockchain. Unlike a hard fork, which creates two separate blockchains, a soft fork still uses the same blockchain, but introduces additional rules or minor changes to the existing rules. Blockchain users have the option to follow the new rules immediately or to keep using the old ones. The more nodes that accept the change, the more secure the system will be after the fork.

Devices that have not yet upgraded can still participate in the network and add new transactions. Furthermore, all new blocks added by the upgraded devices will remain compatible with the devices that have not yet been upgraded. Eventually, once most of the devices upgrade to the new version, the old rules will no longer be used.

An example of a soft fork is the introduction of SegWit in 2015, which changed the format of Bitcoin transactions and increased the block size, or number of transactions per block. Bitcoin users and crypto platforms may choose to stick to the legacy network or to use SegWit for faster transactions and lower fees.

Forks are a sign of progress and innovation in blockchain technology. Popular blockchains like Bitcoin and Ethereum have gone through several forks since they were first released— each one making the networks more efficient, stable, secure, convenient, and better for crypto adopters.