Block malleability refers to the ability to alter a transaction’s identifier (TXID) before it is confirmed on the blockchain, without changing the transaction’s actual content or value. This can happen when the transaction format allows for certain alterations, such as changes in the digital signature or using different hashing techniques.

When a transaction is malleable, an attacker can create a new TXID for a pending transaction. This can cause confusion, as the original sender may believe their transaction has failed when in fact it has been completed under a different identifier.

This poses challenges for wallets and applications relying on transaction confirmations. One major implication of block malleability is its impact on systems that use multi-signature wallets, where confirmation of a transaction is crucial.

If a transaction can be altered, it complicates the process of verifying which transactions are legitimate and which are not. Overall, addressing block malleability is essential for enhancing the security and reliability of blockchain networks, ensuring users can trust the integrity of their transactions.