Definition
A soft fork is a backward-compatible tightening of consensus rules. Blocks obeying the new restrictions can still be recognized as valid by older software, even though that software does not enforce all the added conditions. This differs from a hard fork, which can permit blocks older rules reject.
How It Works
Updated participants enforce a narrower set of acceptable behavior. Older nodes can follow compliant blocks, but their checks do not provide the same assurance about the new rules. Activation depends on the specific protocol and upgrade design. Bitcoin’s Segregated Witness is an example of a soft-fork upgrade; it is not itself a sidechain.
Key Considerations
Backward compatibility does not make an upgrade risk-free or mean that operators never need to update. Inconsistent enforcement, activation mistakes or disagreement can still cause disruption. A soft fork is a change to validity rules rather than a promise of faster transactions or lower fees. Its practical effects depend on the features being introduced and the extent to which wallets, nodes and other services adopt them.