Similar to the meaning of the idiom ‘arriving at a fork in the road..’, a fork is created when there is a state of change that happens to the software which forces the blockchain to split into two. The original chain will continue as is and the new one will continue where it picked up, with the new software.
Forks arise out of two situations: one, is due to an accidental fork when the coin update becomes incompatible. Using different versions of the software will create two separate ledgers, which shall remain identically different from one another. When one stays as the new version, the other will continue as the old version. This situation will lead to software incompatibilities and requires the developer to remove the bugs and apply a suitable solution to merge the two ledgers.
In the second situation, the hard fork happens when the developer changes the coin’s programming and these changes create an incompatibility between the new and older version. If the rest of the blockchain users cannot accommodate the changes, the coin will become incompatible to use. Therefore to use it correctly, all users of that coin subjected to programming changes should undergo related updates on their chain.
Hard forks are an upgrade of software which introduces a new addition to the network. As such, this new rule will not be compatible with the older version. Software operating on an older version will see the new transaction as void. In order to change over to new chain or block and continue mining an invalid block, all networks need to be upgraded to the latest version.
The soft fork is a change that is backwards compatible. For example, instead of the 3MB blockchain, the new rule may be only 2MB or say 500K blocks. The non-upgraded versions or nodes will still see these new transactions as valid because it still has more (3MB is more than 2MB of the new version). While these non-upgraded versions can continue to mine on the same network, there is a high possibility of these transactions being rejected by upgraded nodes. So soft forks need hash power in their network.
The video attached is courtesy Simply Explained.
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