1. What happens in the bitcoin network when two miners solve a block at the same time?
This creates two versions of the blockchain that begin propagating throughout the network. Eventually one of these two blockchains will become the official blockchain while the other produces stale blocks.
2. What is a stale block?
A stale block is a block of transactions that disregarded in favor of a longer blockchain that contains more POW.
3. How do stale blocks occur?
Stale blocks occur when two different miners add their blocks to the existing blockchain. This creates two versions of the blockchain. As the versions are propagated across the network eventually the version of the blockchain that contains more evidence of proof of work becomes the authoritative blockchain. The other chain drops the unconfirmed blocks and all the transactions are released back into the mempool.
4. Why is it important to wait for more than one block to be confirmed when sending or receiving a transaction?
Because the block that contains the transaction that I care about could be dropped and turned into a stale block. Best practice is to wait until there are 6 confirmed blocks after the block containing the transaction that Iâm watching.