A Bitcoin fork is a change in the rules or the history of the Bitcoin network. The word “fork” comes from the idea of a path splitting into two directions.
There are two main types: hard forks and soft forks.
Soft fork
A soft fork is a change that tightens the rules but remains compatible with older software, at least in theory.
- Nodes that upgrade follow the new stricter rules.
- Nodes that do not upgrade still see the new blocks as valid, because the new rules are a subset of the old rules.
- In practice, social and economic pressure matters. Even soft forks can cause friction if many people disagree.
Think of a soft fork as a club that decides to enforce a stricter dress code. The building is the same, but the rules for entry change.
Hard fork
A hard fork is a change that relaxes or changes the rules in a way that is not compatible with older software.
- Upgraded nodes accept new types of blocks or transactions.
- Old nodes reject those blocks as invalid.
- If both groups keep mining and transacting, the blockchain can split into two separate networks with a shared history up to the fork point.
In that case, users can end up with coins on both chains, and the market decides which fork has more value and support.
Forks in Bitcoin history have been used to:
- Change block size limits.
- Modify script rules.
- Create new projects with different philosophies.
They are important because they reveal governance in practice. Who gets to change the rules, under what conditions, and with what consequences.