Hey everyone, I'm trying to wrap my head around blockchain "forks." I understand that Bitcoin Cash came from Bitcoin, so that fork created a brand new coin. But then I read about upgrades like Taproot on Bitcoin that were also called forks, and those didn't make a new coin. What's the actual rule here? What determines whether a fork splits the chain into two or just upgrades the one we have?
That's a great question that gets to the core of how blockchains evolve. The key difference is between a hard fork and a soft fork, and it all comes down to backward compatibility.
A hard fork (like Bitcoin Cash) creates new rules that are not compatible with the old ones. It's like a highway permanently splitting into two separate roads. This forces a split into two independent blockchains, hence the new coin.
A soft fork (like the Taproot upgrade) introduces stricter rules that are backward compatible. Think of it like adding a new carpool lane to the existing highwaythe old rules still work, so the chain doesn't split and no new coin is created.
The Paybis blog has a really clear breakdown of this with more examples and a handy comparison table. Here's the link: paybis.com/blog/hard-fork-vs-soft-fork/