Cryptocurrency projects rarely remain unchanged. Blockchains are upgraded, made faster, protected against vulnerabilities, and adapted to increasing workloads. Most of these changes go unnoticed by the majority of users. However, project participants are sometimes unable to agree on what the next stage of the network’s development should look like.
In such cases, the blockchain may split. One part of the community continues operating under the existing rules, while another launches its own version of the protocol. This is how forks emerge — branches of existing cryptocurrency projects.
Some of them disappear quickly, while others develop into independent ecosystems with market capitalizations worth billions of dollars. Bitcoin Cash, Ethereum Classic, Bitcoin SV, and many other digital assets were created through forks.
What is a cryptocurrency fork?
The word “fork” comes from the English term fork, meaning a division or branching point. In programming, it refers to the creation of a new project based on the source code of an existing product.
In the cryptocurrency industry, the term is used in two closely related meanings. A fork may refer either to a change in the rules governing a blockchain or to a separate project created using someone else’s open-source code.
In both cases, it involves branching away from the original system. Developers take an existing technological foundation, modify certain parameters, and propose new rules to network participants.
Sometimes, this is a routine technical upgrade. In other cases, the changes are so significant that the blockchain splits into two independent chains.
One of the first notable forks in the cryptocurrency industry was Namecoin, a project launched in 2011 on the basis of Bitcoin’s code.
Not every upgrade is a fork
The terms “upgrade” and “fork” are often used interchangeably, although there is a significant difference between them.
A regular upgrade may improve a wallet’s interface, software performance, or the operation of individual network components. At the same time, the blockchain’s fundamental rules remain unchanged.
A fork affects the protocol itself, meaning the rules by which nodes verify transactions and add new blocks.
For example, Ethereum’s Berlin upgrade changed the cost of executing certain operations and introduced other technical improvements. However, it did not result in the creation of a separate network.
The events following the 2016 hack of The DAO developed in an entirely different way. At that time, the Ethereum community faced not only a technical problem but also a fundamental dispute.
Most participants supported changing the blockchain’s history in order to return the stolen funds. Another part of the community opposed any interference with transactions that had already been confirmed. As a result, the single network split into Ethereum and Ethereum Classic.
Why cryptocurrency projects need forks
The reasons for carrying out a fork may vary considerably. Sometimes a project needs to resolve a specific technical problem, while in other cases a protocol change becomes the outcome of a long-running dispute within the community.
Developers carry out forks in order to:
- increase transaction processing speed;
- reduce fees;
- improve network security;
- eliminate vulnerabilities;
- change the consensus algorithm;
- add new functions;
- revise coin issuance rules;
- restore the network after a serious incident;
- implement a concept that was not supported by the majority of participants.
However, a blockchain is not merely software code. It has no single owner who can independently approve new rules.
Changes must be accepted by developers, node operators, miners or validators, cryptocurrency exchanges, wallet providers, and users. Each group may have its own interests.
Miners are interested in the profitability of their equipment. Users want low fees and convenience. Developers may prioritize technical resilience, while major holders may seek to preserve the project’s economic model.
When a compromise cannot be reached, the dispute may ultimately result in a network split.
For this reason, a major fork is not simply a change to several lines of code. It is simultaneously a technological, economic, and political event within a decentralized community.
Soft fork: an upgrade without a complete split
A soft fork is a change to blockchain rules that maintains backward compatibility with the previous version of the protocol.
Put simply, the new rules become stricter, but older nodes can still recognize newly created blocks as valid. As a result, the network usually continues to exist as a single system.
One of Bitcoin’s best-known soft forks was the SegWit upgrade, which was activated in 2017.
Before its introduction, digital signature data occupied a significant portion of each transaction. SegWit changed the way this data was stored, allowing more transactions to fit into a single block.
The upgrade also resolved the issue of transaction ID malleability and created the technical foundation for the development of the Lightning Network.
Another important Bitcoin soft fork was Taproot. It expanded the network’s capabilities when handling complex transfer conditions and multiple digital signatures.
Following the upgrade, some complex transactions began occupying less space and appeared externally similar to ordinary transfers. This improved efficiency and partially enhanced user privacy.
A soft fork does not usually result in the creation of a new coin. Nevertheless, its activation still requires the support of a significant proportion of network participants.
Hard fork: new rules and a separate chain
A hard fork alters the rules, making the new version of the protocol incompatible with the old one.
Nodes that have not installed the upgrade cannot correctly verify blocks created under the new rules. Participants must therefore choose which version of the network they intend to support.
If almost the entire community moves to the upgraded protocol, the old chain gradually ceases to exist.
However, if both versions receive sufficient support, two independent blockchains emerge. Each of them gains its own developers, wallets, exchange tickers, and digital assets.
This is how Bitcoin split into Bitcoin and Bitcoin Cash in 2017. A year later, Bitcoin Cash itself gave rise to another branch — Bitcoin SV.
The best-known cryptocurrency forks
Dogecoin: a joke that outlived hundreds of serious projects
Dogecoin was launched in 2013 as a parody of the rapidly growing cryptocurrency market. Its creators used the popular internet meme featuring a Shiba Inu dog and did not expect the project to become a major digital asset.
Technically, Dogecoin was created on the basis of Litecoin, which had originally emerged as a branch of Bitcoin.
Dogecoin can therefore be regarded as the result of several successive forks.
DOGE’s main distinguishing feature was its inflationary model. Initially, the maximum supply was set at 100 billion coins, but the cap was removed in 2014. Since then, the network has issued a fixed number of new DOGE every year.
Despite its humorous origins, Dogecoin has built one of the most recognizable cryptocurrency communities. The project has outlived many competitors and become the market’s largest memecoin. As of July 2026, its market capitalization exceeds $11 billion.
Bitcoin Cash: a dispute over what Bitcoin should be
Bitcoin Cash emerged in August 2017 following a years-long debate over Bitcoin’s scalability.
The first cryptocurrency’s network could process only a limited number of transactions. During periods of high demand, users faced rising fees and long confirmation times.
One part of the community proposed optimizing the transaction structure through SegWit and developing second-layer solutions.
Another group believed that Bitcoin should scale directly within the main blockchain by increasing the block size.
The two sides failed to reach an agreement. As a result, a hard fork occurred, and the Bitcoin Cash network was created.
At launch, its block size was increased from 1 MB to 8 MB and later to 32 MB. This made it possible to process more transactions while keeping fees relatively low.
As of July 2026, Bitcoin Cash has a market capitalization of approximately $4.8 billion.
Ethereum Classic: a dispute over blockchain immutability
The history of Ethereum Classic began with one of the most prominent crises of the early cryptocurrency market.
In 2016, an investment project known as The DAO raised a significant amount of funds in ETH. Due to a vulnerability in a smart contract, an attacker was able to withdraw some of the assets.
The Ethereum community faced a difficult choice. It could preserve the blockchain without changes and accept the consequences of the attack, or implement a hard fork to return the funds to those affected. The majority supported the second option.
However, some participants argued that the blockchain should not be altered, even to reverse the consequences of a hack. They continued operating on the original chain, which became known as Ethereum Classic. The updated network retained the name Ethereum.
As of July 2026, Ethereum Classic has a market capitalization of approximately $1.09 billion.
Bitcoin SV: a bet on giant blocks
Bitcoin SV emerged in November 2018 following disagreements within the Bitcoin Cash community. Its supporters claimed that they wanted to return Bitcoin to its original concept as a scalable electronic payment system.
The main scaling mechanism was a radical increase in block size. The limit was initially raised to 128 MB. Developers later expanded it even further, aiming to process large numbers of transactions directly on the main blockchain.
However, large blocks impose greater demands on hardware and network infrastructure. This makes it more difficult for ordinary users to participate in the network’s operation and raises questions about the degree of its decentralization.
Bitcoin SV failed to approach the popularity of Bitcoin or Bitcoin Cash. As of July 2026, the project has a market capitalization of approximately $289 million.
Bitcoin Diamond: a product of the mass-fork era
In 2017, the growth of the cryptocurrency market was accompanied by a genuine wave of Bitcoin forks.
New projects appeared one after another. Their creators modified issuance volumes, mining algorithms, block sizes, or individual transaction parameters. Bitcoin Diamond was one such project.
Its developers promised faster transfers, an increased coin supply, and more accessible mining. However, the project failed to build a sufficiently large community or a developed infrastructure. Interest in it gradually declined as the speculative excitement surrounding Bitcoin forks subsided.
As of July 2026, Bitcoin Diamond has a market capitalization of approximately $11.8 million. The asset is far outside the list of the largest cryptocurrencies and has comparatively low liquidity.
Why most forks do not become successful
The open-source code of cryptocurrency projects is available to everyone. In theory, any developer can copy it, modify several parameters, and launch a new network.
However, creating a blockchain is considerably easier than building a complete economy around it.
For a project to develop, it requires:
- reliable developers;
- a sufficient number of miners or validators;
- functioning wallets;
- support from exchanges;
- a liquid market;
- a clear concept;
- an active community;
- real-world use cases.
Without these elements, a new cryptocurrency quickly becomes an illiquid asset that exists in theory but is rarely used.
Many forks attract brief attention because of a recognizable name and the distribution of free coins. However, once the initial excitement ends, investor interest declines, development slows, and trading volumes fall. Therefore, a fork of a successful blockchain does not automatically inherit its value.
Code can be copied. Reputation, security, liquidity, and community trust cannot.