In blackjack, the distinction between soft and hard hands relates to the presence of an Ace in the hand. A soft hand contains an Ace valued at either 1 or 11, allowing for more flexibility in gameplay, as players can adjust the Ace's value without busting. In contrast, a hard hand does not include an Ace or has an Ace counted solely as 1, leading to a more rigid total that is closer to busting with additional cards. This fundamental difference influences players' strategies and decisions during the game.