Crypto Snapshot

A crypto snapshot captures the state of a blockchain at a specific block height and records all existing wallet balances, transactions, and metadata at a specific moment.

Table of contents:

What is a Crypto Snapshot?

A snapshot in crypto is a static copy of a blockchain network state at a definite block height.
The snapshot data includes: 

• The overall state of the blockchain
• Wallet balances
• Transaction records for all assets
• NFT metadata
• Smart contract states

The term block height defines the exact block where the snapshot occurs and functions as a timestamp. It ensures accuracy in ownership and transaction verification. Unlike private keys, which remain secure, a snapshot publicly displays wallet-related data, just as it appears on a live blockchain. This transparency allows for fair and efficient token allocations, governance decisions, and even crypto payment verifications.

How Crypto Snapshots Work

A crypto snapshot records each wallet’s balance at a specific moment, allowing blockchain projects to determine eligibility for rewards, airdrops, or governance decisions. Once the snapshot is taken, users can transfer their tokens without affecting their eligibility for that particular event. It ensures fairness, as holdings at the time of the snapshot, rather than subsequent movements, dictate participation. 

Snapshots are significantly faster than full system backups, which can take hours or even days. A snapshot can be completed within seconds, making it a highly efficient tool for blockchain operations. Since they are lightweight, they can be created as often as needed.

Use Cases of Crypto Snapshots

Snapshots serve various purposes in blockchain ecosystems:

• Airdrops and token distributions. Airdrops are one of the most well-known ways to use crypto snapshots. In these events, tokens are distributed to users based on the wallet balances recorded at the time of the snapshot. By using this method, blockchain projects can ensure that tokens are fairly distributed to eligible users, without requiring any additional action from them. 

It means that once the snapshot is captured, users can transfer or move their tokens afterward without jeopardizing their eligibility for the event. Furthermore, it guarantees that the process remains transparent, as each wallet’s balance is recorded at the fixed moment in time of the snapshot.

• Blockchain hard forks. During blockchain forks, a snapshot determines the exact point at which the ledger is duplicated. For example, in the Bitcoin Cash hard fork on August 1, 2017, all Bitcoin holders at block 478,558 received an equal balance of Bitcoin Cash. This process ensured that both chains shared historical transactions and became independent networks that moved forward.
• Initial exchange offerings (IEOs) and token sales. Crypto exchanges use snapshots to determine who is eligible to participate in token sales or Initial Exchange Offerings (IEOs). Many platforms take periodic snapshots of their users’ balances over a set period to be convinced that everyone has a fair chance to participate in these events. 

It is done to prevent any manipulation that could arise from users artificially inflating their balances in the lead-up to an IEO. In some cases, exchanges may even take multiple snapshots and calculate an average balance to further ensure fairness.

• Network upgrades and migrations. When a blockchain undergoes a major upgrade or migration, a snapshot ensures that all account balances, transactions, and holdings are accurately transferred to the new system without loss. It guarantees hassle-free transitions to improved network infrastructures without disrupting user assets.
• Security and recovery measures. Snapshots can also serve as a backup mechanism in case of network attacks or vulnerabilities. If a blockchain experiences a security breach, developers can restore it to a previous snapshot to minimize losses and maintain trust in the network.