Soft Fork

What Is a Soft Fork? 

A soft fork is any alteration to a blockchain for modification or to add some functionality without requiring any fundamental change to the blockchain structure change. A soft fork usually ends the validity of older transactions for nodes that opt to follow the new soft fork rules. 

A soft fork lets the nodes still adopt the old consensus rules to deem the newer transactions or blocks as valid. In programming speak, this means that a soft fork is backward-compatible. This is what differentiates a soft fork from a hard fork which ends forward compatibility for all old consensus following nodes.

A vital aspect of the soft fork in cryptocurrency is that it doesn’t need each miner on the network to agree on the new code. Instead, it can be applied with a majority of miners agreeing to it. This lets blockchain network upgrades be implemented faster and avoids significant rifts in the community.

Soft forks can also be due to a miner's mistake if old nodes violate new rules they didn’t know about. A soft fork can be reversed by applying a hard fork. 

Examples of Soft Forks

Over time and with use, Bitcoin and Ethereum blockchains have implemented several soft forks for network upgrading, issue corrections, or improving functionality. Soft forks are helpful as they help users bypass the more complicated process of hard forks, which requires unanimous approval from all miners. Hard forks can cause networks to split. A famous example of a soft fork is the Bitcoin SegWit upgrade which allows for improved block capacity by removing the signature date from transactions.