Chain Reorganization Definition
Chain Reorganization, also known as blockchain reorg, is a situation when one blockchain becomes longer than the one that the rest of the network currently acknowledges. This happens when a miner or a group of miners create a block that isn’t immediately recognized by the network. As a result, two valid versions of the blockchain exist – one that the network recognizes and one that awaits recognition.
Chain Reorganization Key Points
- Occurs when a longer blockchain version is not immediately recognized by the network.
- Involves the process of discarding blocks in the shorter chain and confirming those in the longer chain.
- Is a natural part of the way blockchain functions and ensures consensus across the network.
- Can have implications on transactions done during the reorganization process.
- Can also be an indication of a potential attack on the network.
What is Chain Reorganization?
Chain Reorganization is a part of the protocol of most blockchain networks. When two or more blocks have the same block height, a fork (split) happens. At this point, different miners see different versions of the blockchain’s history. But once another block is added, making one chain longer than the others, the network opts for the longest valid chain clone.
Why does Chain Reorganization Happen?
Chains reorganize because the blockchain network aims for a consensus. Every transaction must be agreed upon by a majority to maintain a single, trustless record of history. The network always favors the chain with the highest combined difficulty, and to maximize consensus, a chain reorg happens to replace the current blockchain with the longest chain.
How does Chain Reorganization Work?
Chain reorganization occurs when a newly discovered block is on a different chain than the one you were expecting. The old blocks on the shorter chain are discarded, and the block from the longer chain is added. Any transactions in discarded blocks that are not included in the longer chain will return to the memory pool, ready to be added to future blocks.
When does Chain Reorganization Happen?
Chain reorganization occurs dynamically. It can happen anytime when a miner or a group of miners create a block not immediately recognized by the network. However, it’s important to note that chain reorganizations that involve a large number of blocks are rare and could be indicative of a potential attack on the network.
Where does Chain Reorganization Happen?
Chain reorganization happens within the blockchain network. It is part of the blockchain protocol and occurs irrespective of geography. Whether it’s Bitcoin or any other blockchain-based network, the process of chain reorganization is integral to the system’s workings.
Chain Reorganization vs. 51% Attack
Chain reorganization should not be confused with a 51% attack. While both involve the production of a longer blockchain that the network subsequently favors, the primary difference lies in intention. Normal chain reorganizes occur as part of the network’s effort to resolve competing chains and reach consensus. A 51% attack, on the other hand, is a malicious attempt to control and manipulate the network by a group that holds the majority of mining power.
