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Merkle Tree

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A Merkle tree is a hierarchical data structure where data is hashed in pairs repeatedly until a single hash remains — the Merkle root. Blockchains use Merkle trees to represent all transactions in a block in a compact, verifiable form.

How it works

  1. Each transaction in a block is hashed individually: Hash(Tx1), Hash(Tx2), etc.
  2. Adjacent hashes are paired and hashed together: Hash(Hash(Tx1) + Hash(Tx2))
  3. This process repeats, combining pairs level by level, until only one hash remains
  4. This final hash is the Merkle root, which is stored in the block header
        Merkle Root
           /    \
        H(1+2)  H(3+4)
        /  \    /  \
      H1   H2 H3   H4
      |    |   |    |
     Tx1  Tx2 Tx3  Tx4

Why it matters

Efficiency: To verify that a specific transaction is in a block, you only need a small set of hashes along the path to the root (a Merkle proof) — not the entire block. This is critical for lightweight clients (SPV wallets) that don't download full blocks.

Integrity: Any change to any transaction changes its hash, which changes the parent hash, and so on up to the Merkle root. This makes tampering immediately detectable.

See also

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