James A. Donald wrote:
>OK, suppose one node incorporates a bunch of
>transactions in its proof of work, all of them honest
>legitimate single spends and another node incorporates a
>different bunch of transactions in its proof of
>work, all of them equally honest legitimate single
>spends, and both proofs are generated at about the same
>time.
>
>What happens then?

They both broadcast their blocks.  All nodes receive them and keep both, but 
only work on the one they received first.  We'll suppose exactly half received 
one first, half the other.  

In a short time, all the transactions will finish propagating so that everyone 
has the full set.  The nodes working on each side will be trying to add the 
transactions that are missing from their side.  When the next proof-of-work is 
found, whichever previous block that node was working on, that branch becomes 
longer and the tie is broken.  Whichever side it is, the new block will contain 
the other half of the transactions, so in either case, the branch will contain 
all transactions.  Even in the unlikely event that a split happened twice in a 
row, both sides of the second split would contain the full set of transactions 
anyway.

It's not a problem if transactions have to wait one or a few extra cycles to 
get into a block. 

Satoshi Nakamoto



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