Chain Reorganization is the only way to make changes to the state of the network, including undoing confirmed transactions.

Blockchain technologies are used in various cryptocurrency systems to add information about monetary transactions and store data unchanged. When creating a new transaction, each one is added in the format of a new block, which is necessarily related to the previous one. From this link from the genesis block, a specific sequence is formed: a chain of blocks formed into blockchains. However, contrary to popular belief about the impeccable technical reliability of this system, failures may still occur from time to time. In this case, the chain is reorganized to prevent potentially adverse consequences for all participants in the system. Chain Reorganization is the only way to make changes to the state of the network, including undoing confirmed transactions.

Under what conditions is blockchain reorganization performed?

All processes in the distributed ledger system are interconnected, ensuring data storage's reliability and security. Blockchain nodes, in turn, maintain additional copies, allowing for more efficient transaction verification. If a conflict situation arises, for example, if several miners simultaneously create blocks and broadcast them to the network, a reorganization is performed to level out such conflicts. The decision about which branch of the blocks to save is determined by analyzing and assessing the complexity and length of the chain.

Chain Reorganization is also performed when attempts are made to create invalid blocks, potentially threatening the network. The use of this method eliminates data theft from the network.

Thus, Chain Reorganization is a simple and technically sound method for maintaining data security, smooth operation on blockchains, and validating real transactions.