A Bitcoin hard fork is a significant change to the rules of the Bitcoin network that is not backwards-compatible with previous versions of the software. This means that once the new rules are implemented, nodes running the old version can no longer validate blocks created under the updated protocol. As a result, the blockchain can split into two separate chains: one following the old rules and the other following the new ones.

Hard forks usually occur when developers or parts of the community disagree on technical upgrades, governance decisions, or the future direction of the network. These changes may involve adjustments to block size, consensus mechanisms, security features, or transaction processing rules. When consensus is not fully achieved, a chain split may happen, creating a new cryptocurrency that shares the same transaction history up to the fork point.

A well-known example is the creation of Bitcoin Cash in 2017, which resulted from disagreements over block size limits. Later, Bitcoin SV also emerged from further disputes within that community.

During a hard fork, Bitcoin holders typically receive an equivalent amount of the new coin on the forked chain. While hard forks can introduce innovation and scalability improvements, they may also cause market volatility, community division, and temporary uncertainty within the ecosystem.