What is a Bitcoin fork?

A Bitcoin fork refers to a change or divergence in the protocol rules of the Bitcoin blockchain that results in the creation of a new and distinct version of the blockchain. Forks can occur for various reasons, including protocol upgrades, changes in consensus rules, disagreements among stakeholders, or attempts to experiment with new features or governance models.

There are two main types of forks in the context of Bitcoin:

1. **Soft Fork**: A soft fork is a backward-compatible change to the Bitcoin protocol that tightens the consensus rules. It does not require all nodes to upgrade to the latest version of the software and allows nodes running older versions to continue participating in the network without disruption. Soft forks typically result in a temporary fork in the blockchain, where upgraded nodes recognize blocks produced by non-upgraded nodes, but not vice versa.

2. **Hard Fork**: A hard fork is a significant and non-backward-compatible change to the Bitcoin protocol that creates two separate and incompatible chains. It requires all nodes to upgrade to the latest version of the software to avoid splitting the network. Hard forks result in a permanent divergence in the blockchain, with one chain following the new rules and another chain following the old rules.

Bitcoin forks can occur intentionally, as part of planned upgrades or changes to the protocol, or they can occur unintentionally due to software bugs or implementation errors. Forks can also be contentious, resulting from disagreements within the Bitcoin community over proposed changes or governance issues.

Examples of Bitcoin forks include:

- Bitcoin Cash (BCH): Forked from the original Bitcoin blockchain in August 2017 to increase the block size limit and improve transaction throughput.
- Bitcoin SV (BSV): Forked from Bitcoin Cash in November 2018 as a result of disagreements over protocol changes and governance.
- Bitcoin Gold (BTG): Forked from the original Bitcoin blockchain in October 2017 to implement a different mining algorithm and promote decentralization.

Overall, Bitcoin forks are a natural and sometimes necessary part of the evolution of the Bitcoin ecosystem, enabling experimentation, innovation, and improvements to the protocol while maintaining the decentralization and security of the network.