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Chain Split

Chain splits are another term used to describe cryptocurrency forks — the separation of a single original coin into several independently managed projects.

What Is a Chain Split?

Software forks occur when developers copy the codebase of an already existing project and begin their own independent development based on it. This results in the separation of one or more distinct projects from the original, “parent” project.


Chain splits, or cryptocurrency forks, are coins whose codebase has been copied from another, older cryptocurrency and whose further development continues independently of the direction taken by the parent coin.


Due to the fact that a lot of cryptocurrencies, especially in the earlier years of the industry, were released as open-source projects, it is often exceptionally easy to fork a project, even for a developer lacking the skills to create their own coin from scratch. As a result, some of the largest cryptocurrencies today are forks or even forks of forks of different parent projects.


Chain splits can occur due to a large number of diverse reasons. Sometimes developers believe that a cryptocurrency is good in most regards but could benefit from certain technical adjustments: such was the case of Litecoin (LTC), which split from Bitcoin (BTC) in order to allow for faster block generation time, increased total supply of coins and a different hashing algorithm.


At other times, chain splits may be caused by ideological differences, like Bitcoin Cash (BCH), which was forked from Bitcoin over differing opinions on how to scale the coin for a larger user base. Another example is Ethereum Classic (ETC), which split from Ethereum (ETH) over an argument about whether cryptocurrency developers should be able to amend data recorded on the blockchain in order to return stolen coins to their original owners.


Sometimes a crypto fork can be a simple joke, like the Dogecoin (DOGE), a fork of Litecoin that was inspired by an internet meme and at one point reached a market capitalization in excess of $2 billion.


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