Chain Split Definition
A chain split, also referred to as a blockchain split, is an event where a single blockchain diverges into two separate paths. This typically occurs when different cryptominers discover blocks simultaneously or when network participants disagree on blockchain protocols and rules.
Chain Split Key Points
- A blockchain split happens when two miners mine blocks simultaneously or when there’s disagreement on blockchain rules.
- In the event of a chain split, two or more independent blockchains may emerge.
- Chain split may lead to creation of new cryptocurrencies, like Bitcoin and Bitcoin Cash.
What is a Chain Split?
A chain split in the cryptocurrency context refers to the situation when a singular blockchain splits into two separate chains. This phenomenon might occur due to various reasons, such as differing opinions on blockchain rules and protocols, alterations to the underlying code, or variations in transaction history.
Why Do Chain Splits Occur?
Chain splits usually occur due to multiple reasons. If two miners discover blocks simultaneously, it may cause a temporary divergence in the blockchain. More commonly, a split can occur due to a disagreement in the network over the rules governing the blockchain. This is often referred to as a ‘fork,’ and can result in two distinct versions of the blockchain existing simultaneously, each with its own unique set of rules.
When Can a Chain Split Happen?
A chain split can happen at any time. Due to the decentralized nature of the blockchain, it can occur whenever there’s a significant enough disagreement within the community about how the blockchain should function. Or when two blocks of the same height are mined almost simultaneously.
Where Does a Chain Split Take Place?
A chain split takes place within the blockchain network. It can affect all participants who are engaged with that particular blockchain. All blockchain transactions that take place after the split will be independently recorded on the two diverging chains unless a resolution is achieved.
Who is Affected by a Chain Split?
A chain split affects all parties involved with the respective blockchain. From miners, to investors, to developers, everyone who participates in the blockchain ecosystem becomes a part of the chain split, since their transactions would be recorded on one of the two concurrent blockchains.
How Does a Chain Split Impact The Blockchain?
The immediate outcome of a chain split is the creation of two separate blockchains where there was only one. Depending on the rules set out in each chain, it can significantly impact the users. Each chain operates independently post-split, potentially leading to the creation of a new cryptocurrency. For instance, the split of the Bitcoin blockchain in 2017 resulted in the creation of Bitcoin Cash.
