You may have heard of the term ‘snapshot’ or even used it if you’re anything close to a tech person. That is simply, the captured state of a computer system at a particular point in time. But, how does snapshot work and is it any different in the world of cryptocurrencies? If these are the questions that are of interest to you, then we’ll be happy to help you understand the topic in this article – read on to find out!
What Is A Snapshot?
Traditionally in computer systems, a snapshot refers to the captured state of a system at a particular point in time. And when this concept is applied to the world of cryptocurrencies, it is the point at which the developers take a snapshot of the blockchain ledger at a particular block height (or number). In this case, the snapshot documents the existing addresses and their associated information such as transactions, balance, metadata, and so on that exist on the digital ledger at the latest point in time.
How Does Snapshot Work?
Taking a snapshot, also known as a storage snapshot, is similar to taking a photograph of your server's data at a certain point in time. In cryptocurrencies, snapshotting is commonly used to bootstrap blockchains, sidechains, and new nodes, as well as distribute cryptocurrencies for airdrop events.
Hard Forks
A hard fork is an extensive change to a protocol that occurs when a blockchain splits into two blockchains that usually results in the creation of new digital currencies. As such, snapshots are very essential during blockchain hard forks as they mark the block height in which the main chain will be recorded before the new chain is created.
For instance, when the Bitcoin Cash hard fork took place (on August 1st, 2017), every blockchain address that had Bitcoins at block number 478,558 had the balance replicated on the Bitcoin Cash blockchain. The reason for that is to ensure both blockchains share the same historical data prior to the fork. However, once the split has been completed, each blockchain network will operate independently by continuing from the latest block recorded by the snapshot.
Airdrops
Snapshots are often taken before each round of an airdrop event commences – airdrops are typically a marketing campaign designed to distribute a certain cryptocurrency or token as a participation incentive. In this case, snapshots are taken to record the balance of each token holder at a specific point in time, in order for rewards of proportional amount to be disbursed to them.
An example of this was the Optimism Foundation’s airdrop event that rewarded early adopters and active users of projects in the Optimism ecosystem. The snapshot of addresses taken on March 25th, 2022 revealed a total of 248,699 addresses eligible to claim its governance token, OP. And among the eligible participants, repeat Optimism users received the highest allocation, followed by multisig signers, Optimism users, Gitcoin donors, users priced out of ETHereum, and DAO voters with the lowest.
Additionally in most cases, a snapshot allows users to move their funds after it is taken, without compromising their eligibility to participate in that round of distribution.
Historic Use Cases Of Snapshots
- EOS, Tron, and Vechain took a snapshot while freezing all the transactions when they moved away from the ETHereum blockchain.
- Bithereum took a snapshot of the ETHereum global state to spin up a duplicate blockchain.
- Both Bitcoin and ETHereum support dumping the history at different granularities and bootstrapping a new node using the dumped snapshot. Such daily snapshots are available on the web on sites like Blockchair.
- Snapshots are also used while migrating a DApp to a different smart contract or blockchain instance – Tronbet took a snapshot of all ANTE tokens before exchanging them to the upgraded WIN tokens managed by a new smart contract.
Closing Thoughts
In looking for answers as to “how does snapshot work”, we hope that you have attained clarity in the variety of useful ways snapshots can be leveraged particularly in cryptocurrencies. However, snapshots can also result in extremely complicated data chains and lengthy consolidation times if not managed correctly, as they are only intended to be preserved for a limited duration.
