Explaining the differences and similarities between the two common update types for Bitcoin’s consensus rules.

If you ever read or talked to someone about Bitcoin updates like Segwit and Taproot or even network forks such as Bitcoin Cash, you probably stumbled across the terms “hard fork” and “soft fork”. There are quite a lot of misunderstandings and confusion about terminology when it comes to changing Bitcoin’s consensus rules.

For example, despite its harsh sounding name, a “hard” fork is not necessarily something to be afraid of, while a soft fork does not always have to be as “soft” as it sounds. Let’s explore the exact difference between these two abstract concepts, and most importantly, when you should even apply them in the first place. This will help you understand the basic mechanisms behind upgrade proposals for the Bitcoin network more easily in the future.

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