Those of you who are just getting started with cryptocurrencies and have done a little research may have come across the great scaling debate and the topic of bitcoin forks recently. As a result of forks, previous rules are either valid or invalid, depending on the changes. There are two types of cryptocurrency forks: a soft fork and a hard fork, which are simply protocol upgrades. Soft forks are protocol upgrades that do not require a hard fork. While both types of forks can result in significant changes to the underlying protocol, there are two important differences. Soft forking a protocol is possible while maintaining backward compatibility, which means that the new rules can still be interoperable with the legacy protocol. The hard fork method allows rule changes to be made to the software, but it does not allow backward compatibility. When a hard fork occurs, the blockchain is permanently separated from the previous rule-set or version that existed before the fork.

A Bitcoin fork is a divergence in the blockchain network resulting from changes or upgrades to the Bitcoin protocol. This can occur in two forms: soft forks and hard forks. A soft fork involves backward-compatible changes, where only previously valid transactions become invalid, and nodes not upgrading to the new rules can still participate. A hard fork, on the other hand, entails non-backward-compatible changes, leading to a permanent split from the original blockchain. In this case, nodes must upgrade to continue on the new chain. Famous examples of hard forks include Bitcoin Cash and Bitcoin SV, each created to address perceived limitations in transaction speed and scalability. Forks allow developers to implement new features, fix bugs, or address community disagreements about the cryptocurrency's direction.