Bitcoin Cash (BCH) has experienced several network upgrades and hard forks since its inception, each sparking debate, uncertainty, and opportunities within the crypto community. One such notable event occurred in late 2020 when the BCH network faced a contentious split between two competing development teams—Bitcoin Cash ABC (BCHA) and Bitcoin Cash Node (BCHN). This divergence raised critical questions for users, exchanges, and investors alike: What happens during a hard fork? How do platforms protect user assets? And what should traders know before, during, and after the split?
This article breaks down the mechanics of a BCH hard fork, outlines how digital asset platforms typically manage these events, and provides clarity on user protections, trading implications, and post-fork procedures—without referencing specific exchange policies from past dates.
Understanding Hard Forks in Cryptocurrency
A hard fork occurs when a blockchain undergoes a significant protocol change that is not backward compatible. This means nodes running the old software will no longer recognize new blocks, effectively splitting the network into two separate chains. In the case of Bitcoin Cash, hard forks have often stemmed from ideological or technical disagreements among developers and miners.
When a hard fork results in two viable chains, it can lead to the creation of a new cryptocurrency. Users who hold the original coin at the time of the fork usually receive an equivalent amount of the new token—a process known as an airdrop based on a snapshot of holdings.
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The 2020 Bitcoin Cash Fork: BCHA vs. BCHN
In November 2020, the Bitcoin Cash network faced a high-stakes upgrade driven by two competing implementations:
- Bitcoin Cash ABC (BCHA) – Backed by Craig Wright and Calvin Ayre, this version proposed changes including replay protection and miner incentives.
- Bitcoin Cash Node (BCHN) – Supported by a broad coalition of node operators, miners, and developers emphasizing decentralization and community governance.
The lack of consensus meant the network risked splitting into two independent blockchains, each with its own transaction history and economic value post-fork.
Exchanges like AAX had to prepare accordingly to ensure user safety, accurate asset distribution, and market stability.
How Crypto Exchanges Handle BCH Hard Forks
To minimize risk during volatile network events, exchanges implement structured protocols covering deposits, withdrawals, trading, and asset management.
1. Deposit and Withdrawal Suspension
Prior to the fork, most platforms temporarily suspend BCH deposits and withdrawals. This precaution prevents transactions from being lost or misrouted due to chain instability. Once network consensus is confirmed and transaction finality is assured on the dominant chain(s), services resume.
Users are advised to complete any necessary transfers ahead of the suspension window to avoid delays.
2. Asset Snapshot for Token Distribution
A blockchain snapshot is taken at a predetermined block height or timestamp—commonly aligned with the expected fork time. For the 2020 event, this was set around Hong Kong time November 15, 20:00.
All users holding BCH in their exchange wallets at that moment become eligible for potential airdropped tokens from the newly formed chain. Distribution follows a 1:1 ratio unless otherwise adjusted by network rules.
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3. Trading Adjustments Across Markets
To maintain market integrity, exchanges often pause certain trading functions:
Spot Trading
All BCH trading pairs are typically disabled before the fork. Outstanding orders are canceled automatically to prevent unintended executions on ambiguous chains. Users must manually close positions or withdraw funds if needed.
OTC and Derivatives Markets
Over-the-counter (OTC) desks may halt BCH trades temporarily. Meanwhile, perpetual contracts like BCH/USDT often remain active but carry higher risk due to volatility. Leverage settings might be adjusted—some platforms cap maximum leverage to reduce liquidation risks during uncertain periods.
Futures and Margin Positions
Holding leveraged positions through a fork carries additional risks:
- Chain reorganization could invalidate price feeds.
- Replay attacks might affect settlement.
- Volatility spikes increase margin call likelihood.
Traders are encouraged to monitor exposure closely and consider reducing leverage ahead of major network events.
Post-Fork Procedures: Naming Rights and Token Support
After a successful fork, exchanges face another challenge: deciding which chain retains the original ticker (e.g., BCH) and which receives a new symbol (e.g., BCHA or BCHN).
This decision is usually based on:
- Community support and node adoption
- Miner hash rate distribution
- Market liquidity and trading volume
- Developer activity and long-term viability
Platforms may enter a transition period, listing both tokens under provisional names until market consensus emerges. Once clarity is achieved, one chain is recognized as the continuation of BCH, while the other operates independently under its new identity.
Users do not need to take action—the exchange handles renaming and ensures balances reflect the correct assets.
What Happens to Staking and Earn Products?
For users participating in yield-generating products such as "Crypto Savings" or "Daily Yield" accounts (formerly referred to as “Wealth Management” products), interest payments continue normally.
If only one chain is supported long-term, rewards are distributed based on that chain’s native token. In cases where both chains are viable initially, platforms assess technical feasibility before extending support for rewards on either or both networks.
Frequently Asked Questions
Q: Do I need to move my BCH to receive forked tokens?
A: No. If you hold BCH on a supported exchange at the time of the snapshot, you’ll automatically be credited with any eligible new tokens once distribution begins.
Q: Can I lose money during a hard fork?
A: While your principal balance is preserved via snapshots, market volatility can affect prices significantly. Additionally, if one chain fails to gain traction, its token value may drop rapidly.
Q: Why do exchanges suspend deposits before a fork?
A: Suspending deposits ensures transactions aren’t sent to incompatible chains. It also allows engineers to verify chain stability and replay protection before resuming full service.
Q: How long does it take to receive forked tokens?
A: Distribution timelines vary. It may take days or weeks after the fork for exchanges to confirm chain validity, implement technical support, and distribute tokens securely.
Q: Will both chains always survive after a fork?
A: Not necessarily. Often, one chain gains stronger community and miner support, leading to greater liquidity and longevity. The weaker chain may see declining usage or eventual obsolescence.
Q: Are hard forks taxable events?
A: In some jurisdictions, receiving new tokens through a fork may count as taxable income at fair market value when received. Consult a tax professional for guidance based on your location.
Key Takeaways for Crypto Investors
Hard forks are natural parts of blockchain evolution—but they require informed participation. Here’s what you should remember:
- Holdings are protected via snapshots, so there's no need to panic-sell or transfer assets prematurely.
- Trading halts are temporary safeguards, not signs of failure.
- New tokens may have uncertain value, so evaluate them carefully before trading.
- Stay updated via official channels, but avoid clicking suspicious links or sharing private keys.
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By understanding how forks work and how platforms respond, investors can navigate these complex events confidently—protecting assets while staying open to emerging opportunities in the ever-evolving crypto landscape.