Chain Split

Understanding Chain Splits in Cryptocurrency

A chain split, also known as a cryptocurrency fork, occurs when developers copy the codebase of an existing project and start their independent development based on it.

This separates one or more distinct projects from the original or “parent” project.

The Ubiquity of Software Forks

Software forks are relatively standard in the cryptocurrency industry, especially in its early years when many cryptocurrencies were released as open-source projects.

Forking a project, even for developers without the ability to create a coin from scratch, is often straightforward.

As a result, some of the largest cryptocurrencies today are forks or even forks of different parent projects.

Chain splits can happen for various reasons.

Sometimes, developers believe a cryptocurrency has potential but could benefit from specific technical adjustments.

Chain Splits Arising from Ideological Disagreements

Ideological differences can also lead to chain splits.

  1. Bitcoin Cash (BCH) forked from Bitcoin due to differing opinions on how to scale the coin for a more extensive user base.
  2. Ethereum Classic (ETC) split from Ethereum (ETH) over a debate about whether developers should be able to modify data recorded on the blockchain to recover stolen coins.

In summary, chain splits, or cryptocurrency forks, occur when developers copy the codebase of an existing cryptocurrency to create an independent project.

These splits can be driven by technical adjustments, ideological differences, or playful intentions, resulting in new cryptocurrencies with unique characteristics and features.