A soft fork is a fork, or a change to a project’s source code, which is backwards compatible, meaning that it is not imperative that all nodes adopt the upgrade. Soft forks preserve consensus and flexibility in a distributed system because they allow some nodes to adopt upgrades and make use of new innovations while other nodes who do not wish to upgrade are not forced out of the network or put at risk.

For example, LED light bulbs offer an improvement on traditional filament light bulbs. However, LED light bulbs can be screwed into the exact same sockets as traditional bulbs. Upgrading a home to LED bulbs therefore does not render traditional bulbs useless.

This characteristic makes LED lightbulbs a soft fork. Due to the benefits of soft forks, Bitcoin development relies heavily on soft forks and avoids hard forks, which demand that all nodes upgrade, at all costs. One principle of Bitcoin development is that no member should be forced out of consensus simply because they do not upgrade their node.

While most Bitcoin nodes currently run the latest version, a node running the very first version of Bitcoin is still compatible and would be accepted by the network.