A soft fork is a change to a blockchain's protocol rules that is backward-compatible — meaning that nodes running older software can still validate new blocks, even if they don't understand the new features.
How It Differs from a Hard Fork
Soft Fork: Old nodes accept new blocks. The chain remains unified. Non-upgraded nodes continue to work but miss out on new features.
Hard Fork: Old nodes reject new blocks. The chain splits into two unless everyone upgrades.
Examples
Bitcoin's SegWit (2017): Changed how transaction data is stored, enabling more transactions per block. Old nodes could still validate blocks, just without understanding the new format.
Bitcoin's Taproot (2021): Introduced Schnorr signatures and improved smart contract capabilities while remaining backward-compatible.
Activation
Soft forks typically require a majority of miners/validators to upgrade. Various activation methods exist — miner signaling (BIP 9), user-activated soft forks (UASF), and speedy trial. The process can be contentious if the community disagrees on the upgrade.