A forked chain occurs when a blockchain undergoes a split, creating two separate paths. This can happen for various reasons, such as disagreements within the community about the protocol, updates in the software, or changes in governance.There are two main types of forks: hard forks and soft forks. A hard fork involves a significant change that is not backward compatible, meaning nodes running the old version will reject the new version. This often results in the creation of an entirely new blockchain, like Bitcoin Cash, which branched off from Bitcoin.A soft fork, on the other hand, is backward compatible and allows for modifications without needing to split the blockchain. It typically requires less consensus from network participants.Forked chains can introduce new features, fix bugs, or enhance security. However, they can also lead to market confusion, as two distinct cryptocurrencies may arise from one original chain. This can affect the value and adoption of both chains and create differing communities of users and developers.