A chain split occurs when a blockchain diverges into two separate paths due to a lack of consensus among network participants, resulting in two distinct versions of the ledger. This can happen during a Bitcoin fork, particularly a hard fork, where changes to the protocol are incompatible with the old rules. When nodes and miners disagree on which rules to follow, whether due to upgrades, ideological differences, or technical disputes, the blockchain splits, creating two independent networks with a shared transaction history up to the point of the fork.

For example, Bitcoin Cash (BCH) emerged from a chain split in 2017 when some developers and miners wanted larger block sizes to improve scalability, while others preferred Bitcoin’s original structure. The split meant holders of Bitcoin (BTC) received an equal amount of BCH, effectively creating a new cryptocurrency. Chain splits can also occur accidentally due to software bugs or attacks, but intentional hard forks are more common in Bitcoin’s history. While some splits lead to successful new projects (like BCH or Bitcoin SV), others fade away if they lack community support. Chain splits highlight the decentralised nature of blockchain, where consensus determines the dominant chain, and forks serve as a mechanism for innovation or conflict within the network.