When a cryptocurrency network upgrades, it is called a fork. There are two types of forks: Hard forks, and soft forks.
A hard fork is an update in which certain users split away from the previous version of a given blockchain. This usually happens when consensus is not met, and one of the groups splits from the other. When the split happens, a new blockchain forms which is not compatible with the underlying code of the previous version of the blockchain from which it is splitting.
The most famous hard fork in Bitcoin’s history is the 2017 Bitcoin Cash fork.
A soft fork is an update that adds new features to a blockchain but the changes do not require all users to update. Soft forks are updates that are achieved through finding consensus with all (or a super-majority of) Bitcoin users. With a soft fork, users who do not update their wallet or full node can still transact / interact with users who did. Many soft forks come in the form of Bitcoin Improvement Proposals (BIPs).