What Is Forking in Crypto? Hard Forks vs Soft Forks

Forking means changing the rules of a blockchain. Every node runs software that checks new blocks against a shared set of rules, called the protocol. When those rules change, old and new software can disagree about which blocks are valid. New to the topic? Start with what a blockchain is and how it works.

Most forks are routine upgrades. A few are disputes that end with two networks and two coins, like Bitcoin Cash, which split from Bitcoin in 2017 (see the Bitcoin Cash price and payment options). This guide covers soft and hard forks, why they happen, famous examples and what a split means for your coins.

What is a fork in crypto?

A fork is a change to a blockchain’s rules, or a moment when the chain divides into two paths. The word is used in three ways:

• Temporary forks. Two miners sometimes find a block at almost the same moment. Bitcoin’s developer documentation explains that nodes then follow the chain with the most proof of work and drop the “stale” blocks of the shorter branch, usually as soon as the next block arrives.
• Rule changes. Developers change the protocol on purpose to add features, fix bugs or respond to an attack. These soft and hard forks are the focus of this guide.
• Code forks. Someone copies a project’s open-source code to launch a new coin on its own blockchain. Litecoin started this way in 2011, which is why people ask whether Litecoin is a fork of Bitcoin.

Rule changes matter because a public blockchain has no central operator: independent nodes must run compatible rules to agree on who owns what. For the mining side, see how proof of work secures a network.

What is the difference between a hard fork and a soft fork?

A soft fork tightens the rules, so old software still accepts the new blocks. A hard fork changes or loosens the rules, so old software rejects the new blocks and must be upgraded to keep following the chain.

Bitcoin’s developer documentation explains why. If upgraded nodes accept blocks that older nodes reject, the result can be “permanently divergent chains”. If the new rules only reject blocks that older nodes would accept, the chain stays together as long as the upgraded side has most of the mining power.

A hard fork does not have to split the chain. Ethereum ships its upgrades as scheduled hard forks that are “usually agreed upon ahead of time so that clients adopt the changes in unison” (ethereum.org). Its latest upgrades as of September 2026 were Pectra (7 May 2025) and Fusaka (3 December 2025). Learn more about what Ethereum is.

Why do blockchains fork?

Blockchains fork to add features, to fix problems, or because the community disagrees about the network’s direction. Only the third kind tends to split a chain.

• Upgrades. SegWit changed how Bitcoin stores transaction signatures, and Taproot added more flexible ways to set spending conditions.
• Fixes. In 2016, Ethereum forked in July after the DAO hack, and again in November with Spurious Dragon, a response to denial-of-service attacks.
• Disagreements. Bitcoin Cash came out of a dispute over how Bitcoin should scale: its supporters wanted bigger blocks to fit more transactions.

No single company decides a fork. Node operators, miners or validators, exchanges and wallet providers each choose which software to run, and a chain lasts only as long as people keep using it.

What are the most famous crypto forks?

These forks shaped Bitcoin and Ethereum. Dates and block numbers come from the projects’ own documentation and a block explorer.

• 20 July 2016: the DAO fork. An app called The DAO was drained of over 3.6 million ETH. At block 1,920,000, Ethereum forked to move the funds to a contract where DAO token holders could withdraw them. Some miners refused and kept the original chain as Ethereum Classic (ETC). Compare Ethereum and Ethereum Classic, or see the Ethereum Classic price and payment options.
• 1 August 2017: Bitcoin Cash. After a long dispute over block size, the chain split after block 478,558. Bitcoin Cash raised its block size limit to 8 MB and added replay protection. Learn what Bitcoin Cash is, or compare Bitcoin and Bitcoin Cash.
• 24 August 2017: SegWit. The Segregated Witness soft fork took effect on Bitcoin at block 481,824. Older nodes kept working, and the chain did not split.
• 15 November 2018: Bitcoin Cash splits again. Two groups released incompatible rules for the same scheduled Bitcoin Cash upgrade. One chain kept the name Bitcoin Cash; the other became Bitcoin SV (BSV).
• November 2021: Taproot. This Bitcoin soft fork activated at block 709,632. It lets coins be locked with complex spending conditions that stay hidden unless they are used.
• 15 September 2022: the Merge. Ethereum’s Paris upgrade moved the network from proof of work to proof of stake. It was a planned hard fork, and the upgraded chain carried on as Ethereum.

What happens to my coins when a chain splits?

If you controlled your own private keys at the moment of the split, you hold the same balance on both chains. Whether you can use the new coins depends on your wallet and on which services support the new chain.

A split copies the whole history up to the split block, and the same private keys control the coins on both chains. What that means depends on who holds your keys:

• Your own wallet. You can reach both coins, but only with wallet software that supports each chain. See what a crypto wallet is.
• An exchange or other custodial service. The service holds the keys, so it decides whether to support and credit the new coin. Policies differ.

Replay protection matters too. Without it, a transaction signed on one chain can be copied onto the other, moving coins on both. Bitcoin Cash built it into its 2017 fork, and Ethereum added it in November 2016 with EIP-155, which ties each transaction to one chain ID.

• Guard your recovery phrase. Never type it into a site or app that offers to “claim” forked coins. Bitcoin.org warns that “no legitimate person, business, or support team will ever ask for your seed phrase or private key.” See how to spot phishing attacks.
• Expect volatility. Prices on both chains can swing sharply around a split.
• Keep records. New coins from a fork can be taxable (see the questions below).

Malcolm O'Mahony

Malcolm is a Content Marketing Manager at Coinmama. He's passionate about Web3 and specializes in making complex concepts easy to understand. Crypto since 2017. Coinmama since 2020.

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