The more blocking happens on SQL Server the less concurrency the system. A certain amount of short blocks are unavoidable but too many blocks for longer periods of time can degrade performance and increase the chances of SQL Server deadlocks.
SQL Server blocking
SQL Server blocking occurs when one connection (user process or application process) places a lock on a table (or a number of rows) and a second connection attempts to read or modify the data under the lock. Depending on the type of the lock, this can cause the second connection to wait until the first connection releases its lock. A blocked connection waits indefinitely for the blocking connection to release its lock.
The more blocking happens on the server the less concurrency the system achieves. A certain amount of blocking is unavoidable but too many blocks for longer periods of time can degrade the performance of SQL Server.
SQL Server deadlocks
The combination of two blocked connections where the first is blocking the second and the second is blocking the first is called a deadlock. Since deadlocks are not naturally resolved with time, SQL Server automatically kills one of the connection (Deadlock victim) once it detects a deadlock. This allows the other connection to continue with its transaction.
Although deadlocks can be caused by two short blocks (Fraction of a second), it is often the long blocks that increase the chances of a deadlock to happen.
Blocks escalating to deadlocks
The following diagram shows the sequence of events leading to a deadlock. Consider two applications (A1, A2) accessing two different table (T1, T2):
Event 1: A1 places a lock on T1 inside its transaction and continues to execute other statements
Event 2: A2 places a lock on T2 inside its transaction and continues to execute other statements
Event 3: A1 attempts to place a lock on T2 (Needs to access T2 before it can finish the transaction) but has to wait for A2 to release its lock
At this point, a block is created since A2 is blocking A1
Event 4: While A1 is waiting, A2 attempts to place a lock on T1 (Needs to access T1 before it can finish its own transaction)
A deadlock is created since two connections have blocked one another. SQL Server automatically resolves the deadlock by choosing one of the connections as a deadlock victim and killing it.