Blockchain technology uses complex processes to store and distribute data among node operators securely.
Each active copy of the distributed ledger, or blockchain, is considered a node.
Nodes are responsible for keeping their blockchain copies up-to-date to verify transactions successfully.
This is where chain reorganization plays a vital role.
Adapting to a Growing Blockchain
A blockchain comprises a series of blocks connected in a distributed ledger.
Each block contains hundreds or thousands of processed transactions.
However, as the blockchain grows and more transactions are completed, the chain of blocks becomes longer.
Chain reorganization is the process in which a node deactivates blocks in its old longest chain to add the latest blocks, which form the new longest chain.
Ensuring Consensus in Busy Blockchains
Chain reorganization typically occurs in busy blockchains like Bitcoin and Ethereum, where nodes may produce new blocks at the same time and position.
When these nodes update their copy of the ledger, the node with the shorter follow-up chain undergoes chain reorganization.
Essentially, chain reorganization ensures that all node operators have the exact copy of the distributed ledger.
Chain reorganization is a central process that facilitates the smooth operation of blockchains.
Without the ability to reorganize the chain, the concept of a unified ledger existing among all nodes would be impossible.
Potential Impact of Chain Reorganization on Transactions
Some analysts argue that chain reorganization can potentially result in rejected transactions.
In theory, this could occur if your transactions are recorded in an orphan block that gets rejected.
However, such instances are rare.
In most cases, the transactions recorded in the orphan block and the block that becomes part of the new longest chain are the same.
Maintaining Consistency
Chain reorganization is a relatively fast process that takes place within seconds and does not slow down transaction processing times.
This essential mechanism makes blockchain technology versatile in its applications and use cases.
All copies of the ledger saved across different nodes remain identical thanks to chain reorganization, ensuring the validity of all recorded transactions.