Soft Fork

A soft fork is a backward-compatible upgrade to a blockchain’s protocol that is less disruptive than a hard fork since it doesn’t require a complete split of the network. It introduces new rules or conditions that are not present in the older version, but allows non-upgraded nodes (computers in the network) to continue participating in the network without mandatory upgrades.

Unlike hard forks, which often result in a permanent split into separate blockchains, the soft fork is a subset of new rules that are often stricter than the previous version. Nodes can still recognise and validate new blocks created under the new rules and features without invalidating previously valid blocks or transactions, which helps to maintain continuity, improve security, and fix bugs.

For a soft fork to succeed, a majority of miners must adopt the new rules (typically 90% to 95% hashpower). A well-known example of a soft fork in cryptocurrency history is Segregated Witness (SegWit), introduced to the Bitcoin blockchain in August 2017.

SegWit changed how transaction data is stored, allowing upgraded nodes to process transactions more efficiently, and non-upgraded nodes to continue validating transactions under the old rules.