## Understanding Fork Mechanisms in Blockchain Networks

### What happens during a protocol change?

When a blockchain undergoes a major update of its operating rules, this is called a fork. This process creates a bifurcation point in the transaction history of the network. The network validators—called nodes—who each maintain a complete copy of the ledger, must decide whether to adopt the new version of the protocol or to keep the old version. This collective decision determines the future of the blockchain and its users.

### The two categories of forks: very different implications

There are two major approaches to modify a blockchain: the soft fork and the hard fork, each having radically different consequences.

**The soft fork: a reversible and secure update**

This category of modification is designed to maintain compatibility with previous versions of the protocol. Nodes that refuse to update will continue to recognize the blockchain as valid. This is a restriction of the existing rules rather than a complete revolution of the system. These updates allow for the integration of new programming features without breaking the network consensus. It's the cautious approach, the one used when one wants to evolve without risking a network split.

**The hard fork: an irreversible transformation of the system**

Conversely, this type of modification fundamentally changes the rules of the protocol in a non-backward compatible way. All nodes in the network must mandatorily update to the new version to remain connected to the main network. If a significant portion of validators refuses this transition or opposes the new rules, the network risks a permanent split: the blockchain divides into two independent paths, each maintaining its own transaction ledger from the point of divergence.

### Concrete examples that shaped the history of cryptocurrencies

**The Ethereum Incident and the Birth of Ethereum Classic**

Ethereum experienced one of the most emblematic hard forks after the DAO hack in 2016. The community was divided on the ethical question of reversing fraudulent transactions. Those who accepted the reversal followed Ethereum in its new direction, while the supporters of the principle of immutability continued on the old chain, which became Ethereum Classic. This split illustrates how a hard fork can create two distinct ecosystems with their own tokenomics and values.

**The evolution of Bitcoin with SegWit**

Bitcoin implemented SegWit (Segregated Witness) in August 2017 as a soft fork to increase transaction capacity. Unlike Ethereum's hard fork, this change allowed the network to evolve without splitting. Non-updated nodes continued to validate transactions, while updated ones benefited from increased block space and reduced fees.

### The real consequences of forks on blockchain ecosystems

These protocol modifications are never trivial. A fork can transform the value of existing cryptocurrencies, create new tokens resulting from a split of the network, or completely redefine the governance and direction of the project. For users and investors, understanding the nature of a proposed fork is crucial for anticipating the impacts on their portfolios and investment strategies.