As we have seen the Bitcoin network contains several miners. It is possible, that the two different miners solve the Proof-of-Work at the same time and thus add their blocks to the last known block in the chain. This is illustrated in below image −
Now, we have two branches after Block 3. Both the branches are valid. So the next mined block may be added in either of the branches. Suppose, the miner adds the newly mined block to Block 104-A, the branch containing Block 104-A will be longer than the branch containing Block 104-B. This is illustrated in below image −
In Bitcoin architecture, the longest branch always wins and the shorter ones are purged. So the Block 104-B has to be purged. Before purging this block, all transactions in this block will be returned to the transaction pool so that they are mined and added to some future block. This is how the conflicts are resolved and only one single chain of blocks is maintained by the system.