What is Chain Split? Read the full Explanation

Fundamental differences in the blockchain chain can actually trigger chain splitting. Read the full explanation here.

Understanding Chain Split

Chain Split is a situation where a blockchain network is divided into two different chains due to fundamental differences in the protocol or consensus adopted by the majority of network participants. 

This event led to the emergence of two chains operating separately, often with two different cryptocurrencies.

Why Chain Splits Happen

Differences in Community Views

Chain splits can occur when the blockchain user and developer communities have significant differences in views regarding the direction of development and changes to the protocol.

Forking

Forking can be the cause of a chain split. 

Forking occurs when a group of developers or part of a community decides to start a new chain with different rules and features, which then results in two different chains.

Consensus Differences

If there are differences in the consensus rules desired by a group of users or miners, this can lead to a chain split. 

For example, disagreements about block size, difficulty level, or consensus mechanism can trigger chain splitting.

Example of a Chain Split Case

One famous example of a chain split was the “Bitcoin Cash Hard Fork” event in 2017. 

At that time, the Bitcoin community experienced differing views on increasing block sizes and scalability. 

Some communities support the implementation of Segregated Witness (SegWit), while others prefer to increase the block size.

As a result, Bitcoin experienced a fork and split into two chains: Bitcoin (BTC), which implemented SegWit, and Bitcoin Cash (BCH), which chose to increase the block size . 

These two cryptocurrencies then develop separately on chains, each with its own protocols and characteristics.

Chain splits can have a significant impact on the crypto ecosystem, separating the community and creating two separate crypto assets. 

Asset holders must understand the implications of a chain split and decide whether they will retain assets on both chains or choose one according to their preferences.

It is important to note that chain splits do not always result in two long-lasting chains. One chain may become dominant while others fade or become forgotten over time. 

Therefore, a deep understanding of the causes and potential impact of chain splits is essential for those involved in the crypto ecosystem.

Also Read:

What is Cross-Chain?

What is a Beacon Chain? Read the explanation

Uses of Supply Chain Using Blockchain

What is BEP-2 (Binance Chain Tokenization Standard)

What is BNB & What Does It Do?

DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.