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6.6Lesson 6 of 8
Forks and upgrades
This lesson answers
- What is a Bitcoin fork?
- What is the difference between a soft fork and a hard fork?
- What was SegWit?
- What is Taproot?
- What is Bitcoin Cash?
- What was BIP-110 and why did the chain split in 2026?
Bitcoin's rules do change, slowly. A change that makes the rules stricter, so that old software still accepts the new blocks, is called a soft fork. Every major upgrade so far was made this way. A change that old software rejects is a hard fork. Either kind can split the chain in two: a hard fork if some people stay on the old rules, and a soft fork if most mining power doesn't follow it.
Soft fork or hard fork
| Soft fork | Hard fork | |
|---|---|---|
| What changes | Rules get stricter: some things that were allowed no longer are | Rules get looser: something old software forbids becomes allowed |
| Nodes that don't upgrade | Still accept the new blocks, and stay on one chain with upgraded nodes as long as most mining power follows the new rules | Reject the new blocks and stay on the old chain |
| If people disagree | Usually the upgrade waits for more support. If its software forces the issue, by rejecting blocks that don't signal for it, a split is possible | Two chains and two coins can result |
Major upgrades so far
| Upgrade | Active from | What it did |
|---|---|---|
| Script addresses | 1 April 2012 | Added addresses starting with 3, so one address can require several keys. |
| SegWit | Block 481,824, 24 August 2017 | Moved signatures into a separate part of each transaction. That fit more payments in a block, fixed "malleability", a flaw that let a waiting payment's ID be changed, and helped make Lightning practical. Added addresses starting with bc1q. |
| Taproot | Block 709,632, 14 November 2021 | New signatures and more private, cheaper ways to use complex conditions. Added addresses starting with bc1p. |
Smaller soft forks also took effect in 2015 and 2016, at blocks 363,725, 388,381 and 419,328, adding stricter signature rules and time locks. Each change was debated publicly for months or years before it was switched on, and each needed broad support. See who runs Bitcoin.
How SegWit and Taproot were switched on
Both used signaling: miners mark their blocks to show they are ready, and the change locks in once enough blocks in a two-week period carry the mark. SegWit needed 95% and stayed far below it for months. It got there in the summer of 2017 after two pushes. Under BIP 148, some node operators said they would reject blocks that didn't signal from 1 August. Under an agreement among companies and miners called SegWit2x, miners themselves began rejecting blocks that didn't signal from 23 July. After that nearly every block signaled. SegWit locked in on 9 August and switched on at block 481,824 on 24 August 2017. SegWit2x's second step, a hard fork to bigger blocks, was called off that November.
Taproot used a shorter test called Speedy Trial. Miners had from April to August 2021 to signal, and 90% of blocks in a two-week period had to do so. They did by June, and Taproot switched on at the preset block 709,632 that November.
When people disagreed: Bitcoin Cash (2017)
In 2017 there was a long argument about whether to make blocks much bigger so they could hold more payments. One group went ahead with a hard fork on 1 August 2017. The two chains share every block up to 478,558. Bitcoin Cash's next block was larger than Bitcoin allowed, so Bitcoin nodes rejected it. Bitcoin carried on under its old rules and switched on SegWit three weeks later. Anyone holding bitcoin before the split also held the same amount of Bitcoin Cash afterwards, on its own separate chain.
When people disagreed: BIP-110 (2026)
In 2025 a dispute grew over data that isn't payments, such as images and text stored in transactions. In October 2025 Bitcoin Core 30.0 stopped limiting, by default, how much data its nodes pass on in OP_RETURN outputs, small fields for notes that can never be spent. The old default limit was 83 bytes. Opponents proposed BIP-110, a temporary soft fork. For about a year it would have made most large data invalid: new outputs over 34 bytes (OP_RETURN notes up to 83 bytes were still allowed), pieces of data over 256 bytes, and a few Taproot features. Coins created before it started were exempt. Bitcoin Knots, another node program, added it in May 2026 for users who chose to switch it on.
It needed 55% of blocks in a two-week period to signal support. If that didn't happen, nodes running it would reject every block that didn't signal, starting at block 961,632. In the last two weeks before that, 51 of 2,016 blocks signaled, about 2.5%. Block 961,632 was mined at 19:35 UTC on 8 August 2026 without the signal. Nodes running BIP-110 rejected it and followed a separate branch that very little mining power built on. A node following the main chain only ever received the headers of its first two blocks. By 12 August, a BIPs editor counted four blocks on that branch, against 533 on the main chain. The proposal was marked Closed in the BIPs repository on 10 August. That repository records proposals; it doesn't decide Bitcoin's rules. Later Knots releases added a hard fork for that branch, switching its mining to a different method, BLAKE2b, so the machines that mine Bitcoin can't add to it.
Coins that existed before the split exist on both branches, so a payment meant for one can sometimes be copied onto the other; wallets and exchanges have to take care. This site's figures come from a node following the chain that nearly all mining power kept building.
The arguments
Supporters said stored data puts a lasting cost on everyone who runs a node, who is never paid for it, while the fee goes to one miner. They said some of it can be material node operators object to or that may carry legal risk, that it competes with payments for space, and that relay filters alone can't stop miners who include it. They pointed out that the limits were temporary and left existing coins alone.
Critics said determined users can split or disguise data, so the limits wouldn't stop it. They said filtering pushes people to send transactions straight to large miners, that rules like these can get in the way of future upgrades and, in rare cases, strand coins (the proposal lists such trade-offs itself), and that Bitcoin should stay neutral about how its block space is used. Some also said that pairing a 55% threshold with forced signaling made a split likely.
Each side describes the other's chain as the one that left Bitcoin. The chain shows which branch mining power followed. It can't settle what the rules should be.
Forks you may hear about
"Fork" is also used for new coins that copy Bitcoin's code but start their own chain from scratch, and for offers of "free coins" from a fork. Be careful with the second: tools that ask for your seed phrase to claim fork coins have been used to empty wallets. See seed phrases and backups.
Check yourself
Practice, not a test. Think of your answer first, then reveal it.
1Why does a soft fork usually avoid a split?Reveal
Old software still accepts blocks that follow the stricter rules. As long as most mining power follows them, upgraded and old nodes stay on one chain.
2What happened to people holding bitcoin when Bitcoin Cash split off?Reveal
They kept their bitcoin and also had the same amount of the new coin on the other chain.
3In August 2026, nodes running BIP-110 began rejecting blocks that didn't signal for it. Why did they end up on a separate chain?Reveal
Almost all mining power kept making blocks without the signal. Those nodes rejected them and followed the few blocks that did signal. A soft fork only keeps one chain if most mining power follows it.
Sources
- BIP 16 (addresses starting with 3), BIP 141 (SegWit) and BIP 341 (Taproot, including its Speedy Trial deployment).
- BIP 9 (signaling in blocks), BIP 91 and BIP 148 (the 2017 pushes for SegWit).
- BIP 110, Reduced Data Temporary Softfork, with its rules, threshold and stated trade-offs, its bitcoin-dev discussion (from 26 October 2025), and bitcoin/bips pull request 2245 marking it Closed on 10 August 2026, including a BIPs editor's count of the two branches on 12 August.
- Segwit2x Final Steps, bitcoin-segwit2x mailing list, 8 November 2017 (archived copy): the bigger-block step called off.
- Bitcoin Core release notes: 0.21.1 (Taproot's Speedy Trial, May 2021) and 30.0 (OP_RETURN data limit lifted by default, October 2025).
- Bitcoin Knots release notes: 29.3.knots20260508 (adds BIP-110, May 2026) and 29.4.1.knots20260508 (BLAKE2b mining hard fork, September 2026).
- Activation heights and dates, BIP-110 signaling in blocks 959,616 to 961,631, block 961,632 and the first two block headers of the side branch: read from a Bitcoin node.