Hard Fork vs. Soft Fork

A hard fork is a protocol change that isn't backward-compatible — if even one participant keeps running the old rules, the chain can split into two separate networks — while a soft fork tightens the rules in a way that lets upgraded and non-upgraded nodes keep agreeing on the same chain.

The difference matters because it determines what happens to your coins and your ability to transact when a network changes its rules. A soft fork is close to invisible to a typical user: the chain stays one chain, nothing splits, and swaps continue as normal once the exchange partner's infrastructure has adopted the new rules. A hard fork is different — if the community doesn't reach consensus, the chain can genuinely split into two independent assets, each with its own transaction history from the fork point onward, so a wallet holding coins before the split ends up with a balance on both resulting chains.

This is why Zest, and any exchange partner it works with, treats a live or contentious hard fork as an event that needs active handling rather than something a platform can quietly work around. Deposits and withdrawals of an affected asset are typically paused around the fork block, since a transaction confirmed on the wrong side of a still-unsettled split could later be reversed if that side turns out not to be the one that keeps lasting network support. It's a stricter version of the same caution behind network confirmation requirements — a fork briefly raises how much confirmation depth is actually needed before a transaction can be trusted as final. Once the dominant chain is clear and stable, deposits and withdrawals for that asset typically resume as normal.

Bitcoin's history has examples of both. The 2017 Segregated Witness upgrade was a soft fork — it changed how transaction data was structured without splitting the chain, and nodes that hadn't upgraded could still validate blocks under the new rules. The split that created Bitcoin Cash the same year was a hard fork — a disagreement over block size that produced two separate assets, each tracked independently ever since. A scheduled, non-contentious event like a Bitcoin halving is technically a hard fork too: the reward-cutting rule change isn't backward-compatible, but because every participant upgrades in lockstep well in advance, no split occurs — same underlying mechanism, very different outcome.

Because a fork changes the rules a network runs by, it can also shift the gas fees a chain charges going forward — a rule change that alters how block space or fee markets work affects transaction costs independent of any exchange's own pricing.