Fork as a process
Cryptocurrency fork is a change in its existing code and the algorithm of blockchain operation resulting in a new copy of the already existing network with some modifications. The new fork may replace its predecessor or, depending on a situation, exist on a parallel track.
If the changes are substantial, the nodes of the new network cannot interact with the old ones — this is called hard fork. A soft fork describes an opposite situation when a modification is insignificant, designed to slightly improve the existing system.
You may also come across a «swop» which is still one more fork sub-type where one coin is exchanged for another and a good example is the substitution of SJCX coins by STORJ.
Fork as a coin
New coins resulting from a blockchain modification are also called forks. In other words, fork is not just a process but a result of this process. Most existing currencies were not created from scratch, for they are often de facto Bitcoin or Ethereum forks.
This is primarily because many projects do not have anything conceptually new and are rogue firms in the blockchain universe.
Their only objective is to raise money in an ICO. However, there are ‘good’ forks. A startup may often aim to improve a certain feature of the existing network, so it does not make sense to write a code from scratch as making certain modifications in the existing one will be enough.
Some believe that virtually all coins are forks as developers get inspired by other people’s projects and willingly borrow ideas from their colleagues. From this perspective, the term ‘fork’ meaning a ‘daughter cryptocurrency’ is rather vague and may be applicable to nearly all coins.