The blockchain with the most blocks in it becomes the consensus blockchain. If you build a blockchain higher than the existing blockchain without building off of it, the One True Bitcoin Client will anoint your chain as the true chain. Only the true chain happened, from the perspective of the bitcoin client. Non-consensus chains mean nothing.
A chain losing consensus can happen retroactively (and by design does, frequently), but shouldn't after about 6+ confirmations (~1 hour of work by the network) unless you control a lot of power and are willing to secretly build a competing chain starting from a point in the past and build past the existing consensus chain. If you are willing and capable of outrunning the network for sustained periods of time, you can rollback the history believed by the network and replace it with a history which includes only those transactions which you think should have happened.
For example: did you pay your rent an hour ago? Did your landlord accept your payment after an hour and send it to Bitstamp, thereby getting money? Did Bitstamp then allow people to withdraw it? Psych. You remember that happening, but the Bitcoin consensus now says that the Bitcoin half of all those transactions never happened.
You could, for example, announce "Apropos of nothing: we find that transactions with 1% fees [paid to the miner of the block] are pleasing to the Bitcoin gods and are only willing to include them in our blocks. BTW, we will also rollback history periodically for the hell of it. If you want your transactions to survive rollbacks, take note."
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The blockchain with the most blocks in it becomes the consensus blockchain. If you build a blockchain higher than the existing blockchain without building off of it, the One True Bitcoin Client will anoint your chain as the true chain. Only the true chain happened, from the perspective of the bitcoin client. Non-consensus chains mean nothing.
A chain losing consensus can happen retroactively (and by design does, frequently), but shouldn't after about 6+ confirmations (~1 hour of work by the network) unless you control a lot of power and are willing to secretly build a competing chain starting from a point in the past and build past the existing consensus chain. If you are willing and capable of outrunning the network for sustained periods of time, you can rollback the history believed by the network and replace it with a history which includes only those transactions which you think should have happened.
For example: did you pay your rent an hour ago? Did your landlord accept your payment after an hour and send it to Bitstamp, thereby getting money? Did Bitstamp then allow people to withdraw it? Psych. You remember that happening, but the Bitcoin consensus now says that the Bitcoin half of all those transactions never happened.
You could, for example, announce "Apropos of nothing: we find that transactions with 1% fees [paid to the miner of the block] are pleasing to the Bitcoin gods and are only willing to include them in our blocks. BTW, we will also rollback history periodically for the hell of it. If you want your transactions to survive rollbacks, take note."