Bitcoin Soft Fork Explained: Taproot, SegWit and Future Upgrades

Short answer: A bitcoin soft fork is an upgrade that only makes the rules stricter. Everything that is valid under the new rules is also valid under the old ones. That is why old nodes and wallets simply keep running, and no second bitcoin is created. This is how SegWit (2017) and Taproot (2021) came into the network. You don't need to do anything with your coins.

Bitcoin has no boss who rolls out an update. Yet bitcoin has changed several times since 2009: new addresses, cheaper transfers, the foundation for Lightning. How does that work without the network breaking apart, and without anyone being able to touch the 21 million? The answer is the bitcoin soft fork. Once you understand it, you also see why bitcoin changes so slowly and why that is good for long-term holders. All figures are as of Nov 13, 2026.

Who makes bitcoin's rules?

Bitcoin's rules are in the software that thousands of people run on their computers: the nodes. Each node checks every block itself: are the signatures correct? Does the miner issue no more new bitcoin than allowed? Is the block not too big? A block that breaks a rule is discarded, no matter who built it.

Miners build the blocks, but they cannot change the rules on their own. A block with 100 instead of 3.125 new bitcoin would be invalid for every node, and the miner would have burned electricity for nothing. How miners work and why they stick to the rules is explained in the overview Bitcoin mining explained.

A rule change therefore needs three groups: developers who propose and program it, nodes that run the new software, and miners who build blocks under the new rules. Proposals are written publicly as a BIP (Bitcoin Improvement Proposal) and are often discussed for years.

Bitcoin soft fork and hard fork: the difference

"Fork" means a split in the road. The word describes what happens when not all nodes have the same rules: the chain can split into two paths. Whether that happens depends on which direction the rules change in.

A soft fork makes the rules stricter. A picture for it: a club decides that from tomorrow only blue pens are allowed instead of any color. Anyone who doesn't know the new rule sees only blue signatures and finds nothing wrong with them. Old nodes therefore accept the new blocks.

A hard fork makes the rules looser or different, for example bigger blocks. Old nodes consider such blocks invalid. Whoever doesn't update stays on the old chain; whoever updates ends up on a new one. There are then two coins.

Since 2009, bitcoin has introduced all its upgrades as soft forks. That is no accident: nobody is forced to take part, and anyone who doesn't touch their software for years still stays in the same network.

How a soft fork is activated

So that a soft fork doesn't split the chain, ideally all miners should enforce the new rules at the same time. That is what signaling is for: miners set a flag in every block showing whether they are ready.

Counting is done in periods of 2’016 blocks, about two weeks. These are the same periods after which bitcoin also resets the difficulty. If a large enough share of blocks in a period signals, the upgrade locks in ("lock-in"). One period later it applies.

This is how far along the current period is:

How these 2’016-block periods keep the 10-minute beat is explained in the article Difficulty adjustment.

Signaling is not a vote. It only shows that miners are technically ready. Whether an upgrade is wanted is decided beforehand in months or years of public discussion, and in the end by which software nodes and miners actually run.

The most important soft forks since 2010

Source: BIP repository on GitHub, status "Deployed".

Since Taproot, almost exactly five years ago, no further soft fork has been activated. So far, four years or more have passed between the big upgrades.

SegWit 2017: the dispute that shaped bitcoin

SegWit (Segregated Witness) separates the signatures from the rest of a transfer and counts them at only a quarter in the block. That way more transfers fit in a block without old nodes seeing bigger blocks. It also fixed a flaw that made Lightning channels unsafe. What that means for your fees is shown in the article Bitcoin transaction fees and the mempool.

Its introduction was the biggest dispute in bitcoin's history. Some miners and companies wanted bigger blocks through a hard fork instead of SegWit, and did not signal. Users then announced a "User Activated Soft Fork" (BIP 148): from Aug 1, 2017, their nodes would reject blocks without a SegWit signal.

The miners gave in and activated SegWit via BIP 91. On Aug 24, 2017, SegWit applied from block 481’824. The group that wanted bigger blocks had already split off on Aug 1, 2017 through a hard fork as Bitcoin Cash. Since then it has been clear: users with their nodes have the last word, not the biggest miners.

Taproot explained simply: what the 2021 upgrade brought

Taproot is the most recent big upgrade so far. It brought three things that work together.

1. Schnorr signatures (BIP 340). A new signature method, shorter than the old one. Several signatures can be combined into a single one, for example with the MuSig2 method.
2. Hidden conditions (BIP 341). A wallet can have many conditions, such as "2 of 3 keys" or "after one year an emergency key is enough". When spending, only the condition you actually use becomes visible.
3. The same appearance. If all parties agree, even a complex wallet looks like an ordinary payment on the blockchain. Anyone analyzing the blockchain can no longer tell whether a person or a group is behind it.

You can see Taproot in addresses starting with bc1p. Almost every current wallet can send to them, and many can create them too.

Taproot had a side effect nobody planned: since early 2023, "inscriptions" (also called Ordinals) have used the space for Taproot scripts to write images and text into the blockchain. That drove fees up sharply at times in 2023 and 2024, and is the origin of the data disputes that followed in 2025 and 2026.

What Taproot costs you: SegWit and Taproot compared

Taproot shifts the costs: paying to a Taproot address takes a little more space, spending from it later a little less.

What these amounts in satoshi are worth at other prices, the sats calculator converts for you.

When a soft fork fails: BIP 110 in August 2026

A soft fork only prevents a split if the large majority of miners take part. What happens when that is missing was shown in 2026 by the proposal BIP 110. It aimed to strictly limit data in transfers for one year and was shipped in the node software Bitcoin Knots.

Instead of 95%, it required only 55% signaling and made the signal mandatory from block 961’632. In the period before, only 51 of 2’016 blocks had signaled, 2.5%. On Aug 8, 2026, nodes running BIP 110 rejected all other blocks and ended up on a chain of their own. That chain reached two blocks and then stalled. The BIP repository has listed the proposal as "Closed" ever since.

Anyone using the normal software noticed nothing. For you as a holder this is the most important lesson: bitcoin only changes when almost everyone goes along. That also protects you from changes you don't want.

Future upgrades: what is being discussed

As of Nov 13, 2026, no new soft fork has been agreed or scheduled for activation. Three topics are mainly being discussed.

Cleaning up old weaknesses (BIP 54, "Consensus Cleanup"). The proposal closes four old gaps: a trick by which a majority of miners could artificially lower the difficulty (timewarp), blocks that take minutes to verify, a weakness with 64-byte transactions and duplicate transactions. The text is finished; no activation is scheduled.

Covenants: conditions on where coins may go. Proposals such as CHECKTEMPLATEVERIFY (BIP 119), OP_CAT (BIP 347), CHECKSIGFROMSTACK (BIP 348) or OP_TEMPLATEHASH (BIP 446) would, for example, allow vault wallets: if your key is stolen, you can still claw back a withdrawal within a set period. Lightning could become cheaper and simpler with them. There is no agreement yet on whether, or how.

Protection against quantum computers. BIP 360 proposes a new address type (Pay-to-Merkle-Root) meant to protect against attacks on public keys that have been exposed for a long time. BIP 361 sketches how old signature methods could be phased out later. Both are drafts. Whether and when quantum computers will become dangerous for bitcoin is open. How big the threat is today is assessed in the article Quantum computers and bitcoin.

Source: BIP repository on GitHub, as of Nov 13, 2026.

What a bitcoin soft fork means for you as a holder

For long-term holders the good news is: a soft fork asks nothing of you. Your coins stay at their addresses and can still be spent, including coins on addresses from 2010. The fixed basic rules, above all the 21 million, were never up for debate.

Still, there are four things you should know:

1. Keep your wallet up to date. You only use new address types if your wallet knows them. An update of the wallet app is enough for that.
2. With your own node, you check for yourself. An old node accepts new blocks but doesn't check the new rules. With an up-to-date own bitcoin node you enforce the rules yourself and, in a dispute, choose which software you follow.
3. No pressure to act on fork headlines. In a split like 2017 you had coins on both chains afterwards. You didn't have to sell or move anything.
4. Your seed phrase stays secret. With every split, sites appear that want to pay out the "new coins" to you and ask for your seed phrase in return. That is theft. More scams are shown in Spotting bitcoin scams.

Upgrades change how you use bitcoin, not how many there are. Where the price stands relative to its long-term trend is shown by the Power Law analysis; how we calculate is in the methodology. You learn wallet, backup and transfers step by step in the academy under "Understand & secure". More articles on mining, nodes and technology are collected in the category Mining & technology.