Crypto glossary

Fork

A fork is a change to the rules a blockchain follows. A soft fork tightens the rules in a backward-compatible way, while a hard fork changes them so that old software no longer accepts new blocks. A hard fork only splits a chain into two when part of the network refuses to upgrade.

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Soft forks

In a soft fork, the new rules are stricter than the old ones. Blocks valid under the new rules are still valid to nodes running old software, so the network can upgrade gradually. Bitcoin's SegWit upgrade, activated in August 2017, is a well-known example.

Hard forks

A hard fork loosens or changes the rules in a way old software rejects. Every node must upgrade to stay on the main chain. When nearly everyone agrees, a hard fork is simply a network upgrade: Ethereum has carried out many planned hard forks, such as the London upgrade in 2021, without creating a lasting second chain.

When the community disagrees, two chains can continue side by side. In 2016, after the DAO hack, Ethereum adopted a hard fork that reversed the theft, and the chain that kept the original history continued as Ethereum Classic. In August 2017, a disagreement over block size led to Bitcoin Cash splitting from Bitcoin.

What a chain split means for holders

When a chain splits, anyone holding coins at the moment of the split owns coins on both chains, because both share the same history up to that point. Say you held 2 BTC when Bitcoin Cash split off; you also held 2 BCH. The two coins then trade independently, and their combined value has no guarantee of matching the original.

Risks and confusion

Right after a contested split, replay attacks are a risk: a transaction on one chain can be copied onto the other unless the new chain adds replay protection. Scammers also use forks as a pretext, asking people to enter a seed phrase into a tool to claim forked coins. Never share your seed phrase for that purpose.

Fork has a second meaning in software: copying an open-source codebase to start a new project. Many DeFi protocols are forks of earlier ones in this sense.

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Frequently asked questions

Do I get free coins in a fork?

Only in a chain split, and only if you control the private keys or your platform supports the new coin. Most hard forks are ordinary upgrades that create no new coin.

What is the difference between a hard fork and a soft fork?

A soft fork is backward-compatible, so old nodes still accept new blocks. A hard fork is not, so all nodes must upgrade or end up on a separate chain.

Is a hard fork bad?

Not in itself. Planned hard forks are a normal way to upgrade networks. Problems arise mainly when a community disagrees and the chain splits.

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All glossary terms · Educational reference only — not investment, legal, tax or financial advice.