A form of a fork that represents a backward-compatible upgrade or minor or limited change to a blockchain protocol. It arises when the developers of a blockchain decide to alter the network’s rules in a way that does not require all nodes to upgrade and reflect the minor change.

The limited change or upgrade allows nodes running older versions to still validate new transactions or blocks. That is, it does not result in a lasting divergence (forking) of the blockchain. Soft forks are carried out to add certain new features, improve functionality, or bolster security of the existing network. The new version remains compatible with the previous chain, and only blocks or transactions that break the new rules are rejected by the upgraded nodes. However, the rule-breaking nodes remain accepted by the older nodes before the upgrade.

Nodes or participants that have not embraced the new update will still be able to validate and process transactions as per to the updated rules. Though the older version of nodes does not fully support the newly introduced changes in the new version of the software, nodes running the older version of the software can still recognize and co-operate with the new blocks.

However, nodes and participants who have not upgraded their software may not have full access to the new features or functionalities. However, backward compatibility can still be maintained without an impact on the integrity of the network. It ensures that nodes operating under the older versions can still be part of the network. Soft forks cannot be introduced without a majority consensus among network participants to adopt and implement the new rules. Once adopted by miners, validators, or nodes, the soft fork is considered applicable, and the update becomes the new standard protocol for the network.

With a soft fork, old and new nodes co-operate for a certain period of time, until a major upgrade (the so-called hard fork is required). A hard fork entails that all nodes in the network upgrade to the new version of the code after the forking or split.

Soft fork has been used on major cryptocurrency blockchains to implement new and upgraded functionality.