Bitcoin Forks Explained: Soft Forks, Hard Forks and Chain Splits
A fork is a change to Bitcoin's rules or a split of its chain. Learn how soft and hard forks differ, what happened in 2017, and how Bitcoin changes in practice.
By Christopher Cannucciari · Published
Key takeaways
- A fork is either a change to Bitcoin’s rules or a divergence of its chain. Not every fork splits Bitcoin into two coins.
- A soft fork tightens the rules, so old nodes still accept the new blocks. A hard fork loosens them, so old nodes reject the new blocks and a lasting split can follow.
- Brief forks happen from time to time when two miners find a block at nearly the same moment, and they resolve on their own.
- In August 2017 a chain split created Bitcoin Cash. SegWit (2017) and Taproot (2021) were soft forks that upgraded Bitcoin itself.
- If a chain splits, holders may end up with coins on both chains, and scammers use the confusion. Never type your seed phrase into a site that promises free fork coins.
What is a fork in Bitcoin?
In Bitcoin, a fork is a point where the network’s rules change or where its chain divides into two. The word covers several different events, which is why a headline about a fork can mislead.
Every node checks every block against a set of rules and ignores blocks that break them, as What Is a Bitcoin Node? What Running One Means explains. A fork happens when participants no longer agree on which blocks are valid, or on which of two competing blocks came first.
People also use “fork” for copying Bitcoin’s source code to start a new project with its own chain from day one. That is a code fork and does not affect Bitcoin. This article is about forks of the chain and its rules.
What is a soft fork?
A soft fork is a rule change that makes the rules stricter, so every block valid under the new rules is also valid under the old ones. Old nodes keep accepting the new blocks and stay on the same chain, although they may not understand or enforce the new features.
A speed limit is a fair analogy. If the limit is lowered, everyone obeying the new limit is still obeying the old one. Raising it is different, because drivers following the new limit now break the old law.
A soft fork works smoothly when most miners enforce the new rules. If too few do, blocks that break them can appear and the network can split. Node operators who upgrade check the new rules themselves, while those who do not still follow the chain but rely on others for those checks.
SegWit, which activated in August 2017, and Taproot, which activated in November 2021, were both soft forks. What Is Taproot? Bitcoin’s 2021 Upgrade Explained covers the second one in detail.
What is a hard fork?
A hard fork is a rule change that loosens the rules, so blocks valid under the new rules can be invalid under the old ones. Old nodes reject those blocks, and anyone who has not upgraded is cut off from the new chain.
If everyone upgrades, nothing splits: the network moves to the new rules together. If some participants keep the old software and some miners keep producing blocks under the old rules, two chains result, each with its own blocks from that point forward. That outcome is a chain split, and it happens only when enough of the community declines to move.
| Temporary fork | Soft fork | Hard fork | |
|---|---|---|---|
| What happens | Two valid blocks appear at nearly the same time | Rules are tightened | Rules are loosened or changed |
| Old nodes | Follow whichever chain wins | Still accept the new blocks | Reject the new blocks |
| Lasting split? | No, usually settled within a block or two | Not normally, if most miners enforce the rules | Only if some participants keep the old rules |
| Example | Occasional and routine | SegWit (2017), Taproot (2021) | The 2017 split that created Bitcoin Cash |
What is a temporary fork?
A temporary fork happens when two miners find valid blocks at nearly the same time. Different nodes hear about different blocks first, so for a short while the network has two competing versions of the latest block.
It settles when the next block is built on top of one of them. Nodes follow the chain with the most accumulated proof of work, so everyone switches to that branch, and the other block is dropped as stale. Transactions that appeared only in the dropped block go back into the pool of pending transactions and are usually included in a later block.
This is a normal part of how the network operates. It is also part of why one confirmation is not treated as final for large payments, as How Does Bitcoin Work? Blocks, Miners and Keys Explained describes.
What happened in August 2017?
In August 2017, a group of people who wanted larger blocks split from Bitcoin and created Bitcoin Cash, a separate currency with its own chain. The original chain carried on as Bitcoin. In the same month, the SegWit soft fork activated on Bitcoin.
The two chains share every block up to the split and diverge after it. Bitcoin Cash has its own developers and market, so it is not the same thing as bitcoin. The dispute behind the split concerned how Bitcoin should scale, and The History of Bitcoin: From a Whitepaper to a Global Network places it in context. This article takes no side in that debate.
What happens to your coins in a chain split?
If a chain splits, the coins you controlled at that moment exist on both chains, because both share the same history up to the split. Someone holding their own keys could end up with a balance on each chain, and spending on one does not spend the coins on the other. That is the origin of the “free coins” idea, and the reality is more complicated.
Custody decides access. If your bitcoin sits on an exchange, whether you receive anything on the new chain depends on whether the exchange chooses to support it. Nothing requires it to.
Replay risk. A transaction signed on one chain can sometimes be valid on the other too, if no protection was built in. Sending coins on one chain could then also move them on the other.
Value is not guaranteed. The new coins are a separate asset, and nothing ensures they can be sold.
Taxes. How coins received from a fork are treated is a question for the rules that apply to you. How Is Bitcoin Taxed in the US? A General Guide gives the general picture, and a tax professional can answer for your situation.
Why are fork scams common?
Fork scams are common because a split creates confusion and the promise of free money. A typical scheme is a message, ad or website claiming you are owed fork coins and asking you to enter your seed phrase, connect a wallet or pay a fee to unlock them.
Anyone who has your seed phrase can take all your coins, as What Is a Seed Phrase? How Recovery Words Work explains. Treat any request to type it into a site or app found through a message, ad or social post as a scam. Even a genuine claim can involve moving private keys into unfamiliar software, which puts your main coins at risk, so the cautious default is to ignore the offer. Is Bitcoin Safe? The Real Risks and Common Scams lists other red flags.
How does Bitcoin change in practice?
Bitcoin changes through open proposals, and nothing takes effect unless the people who run the network choose to adopt it. Anyone can publish a Bitcoin Improvement Proposal, or BIP, for discussion. Developers review and test it, and software projects such as Bitcoin Core release code that implements it.
Releasing code forces no one to use it. Node operators choose which software to run, miners choose which blocks to build on, and exchanges, wallet makers, merchants and users decide what they treat as bitcoin. There is no vote and no governing body. The informal process is often called rough consensus, and it is slow and sometimes contentious.
Soft forks usually activate through signaling: miners flag readiness in the blocks they produce, and the upgrade activates once enough have. Taproot followed this path and went live in November 2021 with broad agreement. Other networks handle upgrades differently, as Bitcoin vs Ethereum: Key Differences Explained shows.
What should you do when you hear about a fork?
For most holders, the answer is nothing, unless the wallet or exchange you use announces a change that affects you. Keeping wallet software updated is how you pick up soft-fork features such as new address types.
If a chain split is in the news, do not rush. Keep your seed phrase private, ignore unsolicited offers and read what your exchange or wallet provider says. New to the topic overall? The Start Here path covers the basics in order.
Where to go next
- What Is a Bitcoin Node? What Running One Means: the software that enforces the rules, and why upgrades need it.
- What Is Taproot? Bitcoin’s 2021 Upgrade Explained: a soft fork in detail.
- The History of Bitcoin: From a Whitepaper to a Global Network: the 2017 dispute in context.
- Bitcoin vs Ethereum: Key Differences Explained: how another network handles change.
Frequently asked questions
What is a fork in Bitcoin?
A fork is a point where Bitcoin's rules change or where its chain divides into two. Some forks are brief and resolve on their own, some are planned upgrades that most users never notice, and a few create a separate currency with its own chain.
What is the difference between a soft fork and a hard fork?
A soft fork tightens the rules, so blocks that follow the new rules are still valid to old nodes and everyone stays on one chain. A hard fork loosens or changes the rules so that old nodes reject the new blocks, which can lead to two separate chains if some participants do not upgrade.
Is Bitcoin Cash the same as Bitcoin?
No. Bitcoin Cash is a separate currency with its own chain, developers and market. It was created in August 2017 when a group that wanted larger blocks split from Bitcoin, and the original chain continued as Bitcoin.
Do I get free coins when Bitcoin forks?
Not automatically. If a chain splits, coins you controlled at the split exist on both chains, but getting access to the new coins depends on your custody, on wallet support and on whether anyone will trade them. Offers of free fork coins are a common scam theme.
Who decides whether Bitcoin changes?
No one person or company does. Anyone can propose a change, but it takes effect only if node operators, miners and the wider community adopt it. Changes that lack broad support either do not activate or can end in a chain split.
