Explain the difference between a soft fork and a hard fork.

A soft fork and a hard fork are both types of updates or changes implemented to the protocol of a blockchain network, but they differ significantly in their impact on the network's compatibility and consensus rules:

### Soft Fork:

1. **Definition**: A soft fork is a backward-compatible upgrade to the blockchain protocol where the new set of consensus rules are more restrictive than the existing rules. Essentially, it tightens the rules that nodes on the network must follow.

2. **Compatibility**: Since a soft fork is backward-compatible, nodes that have not upgraded to the new protocol can still accept and process transactions from nodes that have adopted the upgrade.

3. **Consensus**: In a soft fork, the consensus rules are adjusted in a way that blocks validated under the new rules are still considered valid by nodes operating under the old rules. Hence, the network remains cohesive, and there is no split in the blockchain.

4. **Example**: In Bitcoin, a soft fork might involve changing the block size limit from 2MB to 1MB. Nodes that continue to enforce the 1MB block size limit would still accept blocks up to 1MB, while nodes with the updated software would only accept blocks up to 2MB but still validate blocks up to 1MB.

5. **Risk**: Soft forks are generally considered less risky than hard forks because they are backward-compatible and do not lead to a permanent split in the blockchain.

### Hard Fork:

1. **Definition**: A hard fork is a non-backward-compatible upgrade to the blockchain protocol where the new set of consensus rules are more permissive than the existing rules. This means it loosens the rules that nodes on the network must follow.

2. **Compatibility**: Nodes that do not upgrade to the new protocol will not be able to validate blocks or transactions that follow the new rules. This leads to a permanent divergence or split in the blockchain network.

3. **Consensus**: In a hard fork, nodes that have upgraded to the new protocol will follow a different blockchain than nodes that continue to operate under the old rules. Each chain will have its own consensus rules and may be governed by different communities or stakeholders.

4. **Example**: During a hard fork in Ethereum, the DAO hack incident led to a split where Ethereum (ETH) continued on the original chain, and Ethereum Classic (ETC) emerged on a new chain with different consensus rules.

5. **Risk**: Hard forks are considered riskier than soft forks because they can lead to community division, create confusion among users, and potentially diminish network security if a significant portion of the community does not upgrade.

### Summary:

- **Soft Fork**: Backward-compatible upgrade that tightens consensus rules, allowing nodes with old software to still participate in the network but follow stricter rules.
 
- **Hard Fork**: Non-backward-compatible upgrade that loosens consensus rules, leading to a permanent split in the blockchain network as nodes with old software can no longer validate new blocks.

Both soft forks and hard forks are essential tools for blockchain networks to evolve and implement upgrades. However, the choice between a soft fork and a hard fork depends on the nature of the upgrade and the consensus among the community and stakeholders involved in the blockchain network.