A version represents a snapshot in time of the entire geodatabase and contains all the datasets in the geodatabase.
Versions are not separate copies of the geodatabase. Instead, versions and the transactions that take place within them are tracked in system tables. This isolates a user's work across multiple edit sessions, allowing users to edit without locking features in the production version or immediately impacting other users and without having to make copies of the data.
When you register a dataset (a feature class, feature dataset, or table) as versioned, two delta tables are created: the A (or adds) table, which records insertions and updates, and the D (or deletes) table, which stores deletions. Each time you update or delete a record in the dataset, rows are added to one or both of these tables. A versioned dataset, therefore, consists of the original table (referred to as the base or business table) plus any changes in the delta tables. The geodatabase keeps track of which version you were connected to when you made the edits that populated the delta tables. When you query or display a dataset in a version, ArcGIS assembles the relevant rows from the original table and the delta tables to present a seamless view of the data for that version.
To be honest, I find the documentation to be rather vague; it doesn't tell me much about how the technology actually works, or what part of traditional database theory it is based on.
I don't imagine many DBA SE community members would have experience with ESRI's versioning technology. So I won't ask something like 'how does it work?'.
Instead, I'm wondering, are there any technologies in the non-spatial database world that are similar to ESRI versioning?