The Bitcoin Cash fork at block 478,558

The fork was scheduled for a specific block height rather than a date, so that both networks would agree on the point of divergence. At block 478,558 the Bitcoin Cash rules took effect, raising the block size limit and removing SegWit from the set of rules the chain enforces. Blocks produced under the new rules were valid to nodes running the new software and invalid to nodes running the old software, which is the defining property of a hard fork.

The split was executed with replay protection, and this is the part of the design that deserves attention. Without it, a transaction signed for one chain is also valid on the other, because both chains share the same transaction format and the same signature scheme up to the point of divergence. A transaction broadcast after the split could therefore be included on both chains, which would move coins twice and create confusion about which chain a payment had settled on. Bitcoin Cash implemented a mechanism that made its transactions invalid on the original chain, so that a transaction constructed for one network could not be replayed on the other.

The result was two chains with a common history up to block 478,557 and separate rules afterwards. Every address that held bitcoin before the split held a balance on both chains, because the ledger state was identical at the moment of divergence. Spending on one chain did not affect the balance on the other, and the two assets traded separately from the first day.

Both chains inherited the full transaction history, the unspent output set as it stood at block 478,557, the issuance schedule, and the proof-of-work algorithm. Both continued to halve the block subsidy on the same 210,000-block schedule, and both retained the twenty-one million coin cap. In the narrow sense of monetary policy, the two chains were identical at the moment of the split.

They differed in the rules they enforce. Bitcoin Cash raised the base block size limit and did not adopt Segregated Witness, so its transactions use the pre-SegWit format and its blocks are measured in bytes rather than weight. Bitcoin retained the weight-based limit introduced by SegWit and continued to develop on that foundation, including the Taproot upgrade in 2021. The major protocol upgrades page lists what was deployed on the original chain after the split.

The two networks also diverged in difficulty adjustment. Bitcoin Cash later modified its difficulty algorithm to respond more quickly to changes in hash rate, a change the original chain did not make. That is a consensus difference in its own right, and it means the two chains no longer share the same rules for how mining difficulty is set.

The fork demonstrated that a group dissatisfied with Bitcoin's rules can implement different ones and continue from the shared history. That is a real option, and it is worth stating plainly: nobody was prevented from doing it, and the original chain was not damaged by it. The network that kept the existing rules continued to operate without interruption.

It also demonstrated the cost. Two chains with the same history compete for the same mining hardware, the same developer attention and the same users, and the smaller of the two is more exposed to hash-rate swings and to the difficulty adjustments that follow. The holders of coins at the split received balances on both chains, but the value of each was set by a market that had to decide, separately, what each network was worth.

The lasting effect on Bitcoin was procedural. The episode made clear that a contentious consensus change carries a risk of splitting the network, and that the risk is not hypothetical. The conservatism described on the why development moves slowly page is a response to that experience as much as to any technical principle.