A Chain Split occurs when a blockchain network diverges into two separate paths, resulting in the creation of two distinct chains. This typically happens when there is a fundamental disagreement among members of the network regarding a proposed change or upgrade to the protocol.
The split usually leads to the formation of two separate cryptocurrencies, each following its own set of rules and protocols. This can occur due to conflicting views on issues such as block size, governance structures, or consensus mechanisms.
When a chain split occurs, users holding the original cryptocurrency are usually awarded an equal amount of the new cryptocurrency on the newly created chain. This can result in uncertainty and volatility in the market, as users and investors navigate the implications of the split on the value and usability of the two separate cryptocurrencies.
Chain splits are rare but can have significant implications for both the affected network and its users. Resolution of the split often involves community debates, network upgrades, and consensus-building efforts to reunify the network or establish distinct paths for the two separate chains.
