Despite its quirky name, a Bitcoin fork is not something you’d want to pick up and try to eat with. In reality, a Bitcoin fork is a process for splitting a blockchain.

Bitcoin is a financial ecosystem where the community manages the network and approves decisions by consensus on how it is run. What is truly remarkable about Bitcoin is that the software is open sourced. Anyone with the right skills can see how it works and put forward improvements to boost efficiency.

This decentralization leads to the growth of a broad cryptocurrency community, each with ideas of their own about how things should be run. This can lead to fundamental differences of opinion that can cause currencies to split, known in the cryptocurrency world as a fork.

But forks aren’t just for when people fall out. There are many reasons why blockchain forks happen, ranging from verifying transactions to resolving problems when mining for cryptocurrency.

What is a Bitcoin fork?

Sometimes forks form during the mining process. Mining occurs when powerful computers crack complex mathematical problems to create “blocks” of verified Bitcoin transactions. These are then added to the blockchain. Miners are rewarded with Bitcoin tokens every time they add a block to the blockchain.

Blocks are made available to miners every ten minutes. Normally, only one miner successfully cracks the puzzles quick enough to create the block. But sometimes two miners mine a block at the same time. Both miners continue to add more blocks, but whichever makes the longest chain survives. The short block is “orphaned” by the network.

Forks also happen when a block contains an invalid transaction. The block is rejected by the wider network and the miner loses out on their Bitcoin reward.

Cryptocurrency and blockchain are both relatively new technologies. In under a decade, both went from niche hobby projects to era-defining tools. Use cases have soared and more people are using both every second of every day. Consequently, the technology is constantly being pushed to its limits, assessed and strengthened by the community to make it both safer and more efficient. Upgrading and improving the blockchain often requires forks.

Forks can generally be split into two categories: Hard and Soft.

What is a hard fork?

A hard fork is a fundamental change to a blockchain protocol that is incompatible with all previous blocks. Hard forks are often the product of ideological or technological dispute within the cryptocurrency community.

After a hard fork, nodes still running the old software are invalid. To continue on the new version created by the fork, all of the nodes will need to follow the new rules.

Hard forks can be implemented for several reasons. One of the most famous forks took place when developers decided to change the size of blocks on the Bitcoin blockchain. The developers thought this would make it faster to mine blocks and help to grow the user base. The result was Bitcoin Cash, a new cryptocurrency incompatible with the original Bitcoin, despite its shared heritage.

But hard forks aren’t always born of disagreement. Sometimes serious security risks are found in old versions of the software and sometimes developers decide that new functions should be added to currencies. These developments are often agreed by consensus and don’t necessarily result in an acrimonious split between those who support them and those that don’t.

What is a soft fork?

While Hard forks can be seen as starting over, soft forks are more like ‘patches’ on the old software. Soft forks usually happen when a blockchain is upgraded and all old transactions are still considered valid.

Soft forks only require the majority of miners on the network to upgrade in order to enforce the rules. Nodes are not required to upgrade because the old rules are still followed and accepted.

Mainstream finance tried and failed to force a changing world to play by its rules. Cryptocurrency took the dynamism of the modern world and built it into its DNA. Adaptability is one of cryptocurrency’s greatest strengths and its ability to encourage discussion, to constantly update itself and to evolve to meet the demands of its users is leaving traditional options in the dust.