Hard Fork vs Soft Fork

A soft fork is a backward-compatible change to a blockchain's rules, so nodes running the old software still accept new blocks and the network stays one chain. A hard fork breaks that compatibility, which is why it can split a blockchain into two.

What a soft fork is

A soft fork tightens the rules into a stricter subset, so anything valid under the new rules was already valid under the old. Old nodes keep following the chain. No new coin, no split. Only a majority of miners/validators need to enforce it.

What a hard fork is

A hard fork widens or rewrites the rules (bigger blocks, new mining algorithm). Old nodes reject the new blocks, so upgrading is mandatory. If a faction refuses, the ledger splits into two chains, each with its own coin.

SegWit: the soft fork that held the chain together

Segregated Witness, activated on Bitcoin in August 2017, moved signature data out of the main transaction body, effectively increasing block capacity and fixing transaction malleability, without breaking old nodes. The network stayed one Bitcoin.

Bitcoin Cash: the hard fork that split Bitcoin

On August 1, 2017, the big-block camp hard-forked, raising the block size from 1MB to 8MB and declining SegWit. Those blocks were invalid under Bitcoin's rules, so the chain split permanently, creating Bitcoin Cash (BCH). BTC holders received an equal BCH balance.

What forks mean if you hold the coins

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Educational purposes only, not financial advice.