A “blockchain fork” occurs when the history of events on a blockchain separates into more than one line, resulting in two or more independent chains. It occurs when participants in a blockchain network do not agree on the same decision-making rules. This breaks the previous chain of events.
There are two kinds of forks: ones that are soft and ones that are hard.
Soft Fork
A soft fork is an update to the blockchain system that does not alter how it currently operates. The new soft fork agreement standards are stricter than the old ones. This means that nodes that continue to utilise the old rules will accept blocks checked using the new rules as acceptable. So there is only one chain, and it remains intact. Nodes that have not updated to the new rules may be unable to comprehend some of the most recent blocks or transactions.
Hard Fork
A hard fork is a blockchain system update that is incompatible with previous versions. When there is a hard fork, the new agreement rules are more open than the old ones. As a result, the blockchain is always unique, and there are always two chains with opposing recordings of events. Nodes that continue to follow the old rules do not accept the new blocks and transactions, whereas nodes that follow the new rules do. Each chain grows on its own, eventually becoming distinct blockchains with their own features, communities, and, in some cases, even their own currencies.
Forks can occur for a variety of reasons, including protocol upgrades, changes to how agreements are created, resolving community issues, or closing security flaws. Forks can be planned by developers or occur naturally when individuals disagree.