What Is a ‘Soft Fork’ versus a ‘Hard Fork’ in Blockchain Upgrades?
A soft fork is a backward-compatible protocol upgrade, meaning old, non-upgraded nodes will still recognize new blocks as valid, even if they don't understand the new rules. A hard fork is a non-backward-compatible upgrade that requires all nodes to update; if not, the network permanently splits into two separate chains with different rules.
Hard forks are often used for major changes.
Glossar
Hard Forks
Disruption ⎊ Hard forks represent fundamental alterations to a blockchain’s protocol, necessitating all nodes to upgrade to maintain consensus; this divergence can introduce volatility into cryptocurrency markets, impacting derivative pricing models reliant on stable underlying asset behavior.
Soft Fork
Upgrade ⎊ This refers to a backward-compatible change to the protocol’s software, where non-upgraded nodes will still recognize blocks produced by upgraded nodes as valid, allowing for gradual adoption of new features or bug fixes.
Hard Fork
Disruption ⎊ A hard fork represents a radical divergence in a blockchain’s protocol, creating a permanent split and typically resulting in a new cryptocurrency.
Fork
Chain ⎊ A fork, within cryptocurrency contexts, represents a divergence in the blockchain's history, resulting from a change in the underlying protocol rules.