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A fork is when a blockchain makes changes to its protocol: the basic rulebook that determines how it operates.
If the changes are major it’s called a hard fork. If they’re minor it’s called a soft fork.
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Diversion ahead
Think of a blockchain like a railroad track. Now imagine the track splits slightly to the right but maintains a forward path parallel to the original track.
That’s a soft fork: there’s a new course, but it doesn’t disrupt the overall train journey and both tracks lead to the same destination.
Now imagine the track splits in two opposing directions.
That’s a hard fork: the change is so significant that it creates a completely separate track with a distinct path and destination.
Soft forks are “backward-compatible” upgrades: They allow nodes (the computers that run the blockchain network) to operate together through the transition, even if some don’t adopt the new rules.
Hard forks are “backward-incompatible” upgrades: Nodes following the old rules cannot interact with nodes following new rules, thus creating two different chains.
Family feud
A fork can cause bitter disputes within a blockchain community. Ethereum’s hard fork in 2016 is a case in point. After a hack on the network led to nearly $60 million of ETH being stolen, a hard fork was proposed to rewrite Ethereum’s transaction history and return the stolen funds to their rightful owners.
This created a rift and two competing viewpoints emerged. The pro-fork camp said the stolen funds should be returned and confidence in Ethereum's security regained, while the anti-fork camp argued that "code is law" and blockchains should remain immutable (unaltered).
The former camp won in the end, and in July 2016 the hard fork was implemented. The original chain, which preserved the hack's transaction history, became Ethereum Classic (ETC). The new chain, which reversed the hack, continued as Ethereum (ETH).
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