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Definition: crypto fork


A blockchain upgrade. There are two kinds of crypto forks: hard forks and soft forks.

Hard Forks
A hard fork means that after changes are made to a blockchain protocol, all nodes must upgrade within a certain time frame. Any nodes that do not eventually upgrade will not be backward compatible. The result is either one new blockchain or two independent blockchains. See Bitcoin Cash and Ethereum Classic.

Soft Forks
In a soft fork, new functionality is added to the blockchain protocol, and the new protocol is backward compatible with the original. A soft fork may never require an update to the older blockchain. However, if there is a deadline to update, it is likely much further out in the future than a hard fork update.

Why Upgrade?
Forks occur when the blockchain community determines that the protocol is lacking in some manner, such as not being able to handle increased transaction traffic. Any number of improvements can be made to a blockchain and cause it to fork. See Bitcoin hard fork and Ethereum hard fork.