Cryptocurrency started with Bitcoin. Bitcoin is a decentralized payment mechanism, that started off in 2008. The base of this first-ever decentralized digital currency was backed by nothing but the mutual trust of the participants of the Bitcoin network.
The Bitcoin protocol was designed with the main purpose of being free from any tampering of the original source code. No single participant is able to act against the network, nor can he deny use to the network in any way. This made Bitcoin the first, in a series of ‘Borderless transparent mutual censorship-resistant immutable’ currency or medium of exchange.
After Bitcoin, it really didn’t take long for other projects to develop, with the main purpose of continuing what Bitcoin started. However, there were some which wanted to replace BTC altogether. By replacing, it doesn’t mean taking Bitcoin and throwing it away, but rather starting something new and claiming the newly specifically created project as being the “original Bitcoin.”
Bitcoin forks have been a matter of much debate in the cryptocurrency sphere. Consensus is mandatory, in order for forks to validly be resolved and allow continuously functioning. A fork without consensus is what leads to a permanent split.
Forks can be categorized into 2 different ways: hard fork and soft fork. Both hard and soft fork types create two different versions of the software. What mainly differentiates them is the fact that a hard fork is meant to create two incompatible blockchains/tokens, while a soft fork creates two compatible versions of the software and token.
A hard fork is a non-backward compatible upgrade to an existing blockchain. This means that all the network nodes on the Bitcoin blockchain must either comply with the fork and update their protocol software or continue with the same outdated protocol by forming another separate Blockchain entity.