A Merkle tree, also defined as a binary hash tree, is a data structure used to efficiently summarize and validate large data sets. It’s a challenge to capture the meaning of Merkle Trees by using words alone. If you are engaged in the cryptocurrency world, you are likely to have not seen the phrase “Merkle Tree” and felt a little off track. Even within the crypto community, Merkle Trees are not a widely-understood concept, but they are also not that complex. You can fish about blockchain courses online and obtain a blockchain technology certification.
Learning Of Blog
- Working of Merkle Trees
- Example of a Merkle Tree
- Why Merkle Trees are essential to Blockchain
- End Words
In this article, we cover all you require to know about Merkle Trees, and why they are essential for blockchain technology.
The Merkle Tree has been all over the place since 1979 when there was a man named Ralph Merkle at Stanford University. Merkle wrote a paper titled “A Certified Digital Signature,” unknowingly creating a significant blockchain component. In his paper, Merkle gave a description of a brand new method of proof-making. Primarily, Merkle designed a data verification process that would allow computers to work much faster than before. Merkle’s idea, now called the Merkle Tree, has fundamentally changed the world of cryptography, including how encrypted computer protocols work. As a result, Merkle Trees has grown in popularity over the years, especially in cryptocurrency. Many cryptocurrencies like Ethereum have also embraced Merkle Trees.
Working of Merkle Trees
A Merkle tree sums up all transactions in a block by generating a digital fingerprint of the whole set of operations, allowing the user to check whether a transaction is included in a block. Merkle trees are created by repetitively hashing pairs of nodes until only one hash is left, this hash is better called the Merkle Root or the Root Hash. They are constructed from the bottom, from the hashes of individual transactions called Transaction IDs. Thus every leaf node is a hash of transactional data, and each non-leaf node is a hash of its previous hash. Merkle trees are binary and consequently require an equal number of leaf nodes. If the figure of transactions is odd, the last hash will be matched once it creates an even number of leaf nodes.
Example of a Merkle Tree
Here is a simple example of a Merkle Tree to help solidify this concept. Imagine four transactions on one block: A, B, C, and D. Each deal is then hashed, leaving us with the following:
- Hash A
- Hash B
- Hash C
- Hash D
The hashes are coupled together, resulting in:
AB Hash and, CD Hash
Both two hashes are hacked together to give us our Merkle Root: Hash ABCD. The Merkle Tree is much more complicated than this, but this should give you an idea of how the algorithms work and why it’s so successful.
Why Merkle Trees are Essential to Blockchain
To grasp how important Merkle Trees are to blockchain technology, imagine a blockchain without them. We’re going to apply to Bitcoin primarily because the usage of Merkle Trees is essential to cryptocurrencies but also simple to understand. For example, if Bitcoin didn’t have Merkle Trees, every node on the network would need to maintain a full copy of every transaction that has ever happened on Bitcoin. You can imagine how much information it would have been. Any authentication request on Bitcoin would take an incredibly large packet of data to be sent over the network, so you need to have it on your own to verify the data. A computer used for validation would have to use a lot of processing power to compare ledgers to ensure that there were no changes. Merkle Trees fix this problem. They hash records in the accounting, which efficiently segregates the data proof from the data itself. Proving that a transaction is valid only includes giving small amounts of information across the network. Besides, it allows you to demonstrate that both variants of the ledger are the same for titular amounts of computing power and network bandwidth.
The use of a Merkle tree can substantially reduce the amount of data that a trusted authority must maintain for verification purposes. It separates the data validation from the data itself. The Merkle tree may reside locally or on a distributed system. Merkle trees have three main advantages:
- They provide a means of proving the integrity and validity of the data
- They require little memory or disk space, as the evidence is computationally straightforward and fast.
- Their evidence and management only require a small amount of information to be transmitted over the network.
Merkle Trees are vital because they make Merkle proof possible. These enable us to quickly verify that the input was included in the specific data set and in what order. Merkle Trees are effective, too. They allow us to compress large data sets by removing all unnecessary branches while keeping the only ones we need to prove. In the world of Blockchain, this means that Merkle Trees provides the following critical features:
- Ability to verify that a transaction is included in a block
- Full efficiency and scalability
- Simplified Payment Authentication
There is far more to discuss Merkle Trees, including how they operate within other blockchain platforms such as Ethereum and how ethereum blockchain developers use them in scaling solutions, etc. Once you understand the fundamentals of Merkle Trees, you can begin to appreciate the protection and efficiency of Blockchain data structures. In all probability, if Merkle Trees had never been discovered, cryptocurrency and blockchain technology would never have existed. Unless there was a suitable alternative, the amount of computing power and storage would be too costly to operate. Merkel Trees are vital to blockchains and allow them to function while maintaining transaction integrity.