Blockchain is a specific sequence of blocks with information.

Causes of Blockchain Splits

There are several reasons why a chain may branch:

• changes in network rules that do not require software updates to function under the new rules. Nodes that have not accepted the conditions can still interact with other network participants. This situation is called a soft fork. Such a change is reversible and does not violate consensus;
• hard fork — occurs when new rules are no longer suitable for the existing network. The consensus mechanism is disrupted, and the blockchain breaks into separate chains whose blocks are invalid for each other. Thus, network users with voting rights can change the rules by creating a new chain. Bitcoin split in 2017 into the original cryptocurrency and a new fork — Bitcoin Cash. It was disagreements in the network that led to the split;
• sharding — a deliberate division of the chain to increase throughput and solve scalability problems;
• 51% attack — malicious miners direct more than half of the existing computing power to mine a single cryptocurrency. This approach allows creating forks or separate chains. For example, Bitcoin SV received three forks during such an attack.

Purposes of Chain Splits

Chains split for very simple reasons:

• users' disagreement with existing rules;
• split due to technical decisions by creators;
• improvement and refinement of the existing network;
• interference by malicious actors;
• economic reasons — obtaining a second cryptocurrency.

Traders should always track forks using a special fork calendar. This will allow successfully buying and selling cryptocurrencies, taking into account planned and unplanned splits.