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What is Merkle Tree in Blockchain?

Vrinda Mathur
Nov 17, 2022

The Merkle tree is an essential component of blockchain technology. It is a mathematical data structure made up of hashes of various blocks of data that serves as a summary of all transactions in a block. It also enables efficient and secure content verification in large amounts of data. It also aids in the verification of data consistency and content. Merkle Trees are used by both Bitcoin and Ethereum. Merkle Tree is another name for Hash Tree.

The Merkle Tree concept is named after Ralph Merkle, who patented it in 1979. The Merkle Tree generates a single block header from a summary of all the information contained in a block's transactions. Even if only one small detail from any of these transactions changes, the Merkle Root must be updated. The Merkle Tree technology aids in determining whether or not a specific transaction exists in a set.

A Merkle Tree, unlike a hash list, can be broken down into single branches and downloaded. If the original version of the data becomes corrupted, only a copy can be downloaded and saved. As a result, Merkle Tree improves the security of blockchain databases.

What is the Merkle Tree?

A hash tree, also known as a Merkle tree, is a tree in which each leaf node has the cryptographic hash of a data block and each non-leaf node has the cryptographic hash of the labels of its child nodes. The vast majority of hash tree implementations are binary (each node has two child nodes), but they can have many more.

Merkle trees, also known as Binary hash trees, are a type of data structure that is commonly used in computer science. They are used to encrypt blockchain data more efficiently and securely in bitcoin and other cryptocurrencies. It is a mathematical data structure composed of hashes of various data blocks that summarize all transactions within a block.

It also allows for quick and secure content verification across large datasets, as well as data consistency and content verification.

The data/transactions in a block are not stored as plain text, but rather in a data structure known as the Merkle tree. In other words, the Merkel tree summarizes all of the transactions in a block. Hash functions such as MD5, BLAKE2, SHA-1, and SHA-256 uniquely hash each transaction in a block to produce a digital fingerprint of the entire set of transactions. The hash function hashes together each pair of hashed transactions, and this process is repeated until there is only one hash for the entire block.

The Merkle tree is a type of binary tree in which the hashes of the transactional data on the bottom row are called "leaf nodes," the intermediate hashes are called "branches," and the hash at the top is called the "root." The Merkle tree is also known as the Hash tree. Each Blockchain block has one Merkle root.

Also Read | 5 Major Types of Blockchain Protocols

How does the Merkle Tree Work?

By creating a digital fingerprint of the entire set of transactions, a Merkle tree stores all transactions in a block. It enables the user to determine whether or not a transaction can be included in a block.

Merkle trees are formed by repeatedly hashing pairs of nodes until only one hash remains. This hash is known as the Merkle Root or Root Hash. The Merkle Trees are built from the ground up.

Every leaf node represents a hash of transactional data, and every non-leaf node represents a hash of its previous hashes. Merkle trees are binary trees, so they must have an even number of leaf nodes. If the number of transactions is odd, the last hash will be duplicated once to create an even number of leaf nodes.

The block header contains Merkle Root. The block header is the part of the bitcoin block that is hashed during the mining process. It contains the hash of the previous block, a Nonce, and the Merkle Tree Root Hash of all transactions in the current block. As a result, including the Merkle root in the block header makes the transaction tamper-proof. Because this Root Hash contains the hashes of all transactions within the block, these transactions may result in disk space savings.

The Merkle Tree ensures the data's integrity. If any single transaction detail or transaction order changes, these changes are reflected in the hash of that transaction. This change would propagate up the Merkle Tree to the Merkle Root, altering the Merkle Root's value and thus invalidating the block. As can be seen, the Merkle tree enables a quick and simple test to determine whether or not a specific transaction is included in the set.

A Merkle Tree creates a common digital fingerprint to represent a large number of transactions all at once. A user can easily determine whether or not the block contains a specific transaction by using this fingerprint.

To create a Merkle Tree, hash nodes pair continuously and repeatedly until the process leaves behind only one hash, which serves as the tree's root. This is referred to as the Merkle Root. These hashes are generated by adding individual transaction hashes from the bottom up.

Also Read | Types of Binary Tree: In-order, Pre-order, and Post-order Implementation Using Python

Advantages of Merkle Trees in Blockchain

Some of the benefits offered by Merkle Trees are as follows:

Advantages of Merle Tree in Blockchain

Discrete Value:

Each block has a distinct hash value derived from the Merkle root. The previous block's hash is also included in the block, connecting one block to the next in the Blockchain. If the hash of a transaction changes, so does the hash of that transaction.

This change cascades up to the Merkle Root, changing its value and rendering the block invalid. This is then reflected in the following block, resulting in a change in its hash, rendering the rest of the Blockchain invalid. As a result, the Merkle tree creates an immutable record of the block's transactions.

Reduces Data:

Blockchains are typically composed of hundreds of thousands of blocks, with each block containing up to several thousand transactions, making memory space and computing power the two major issues when validating data.

Without the concept of Merkle trees, every node on the network would have been required to keep a complete copy of every single transaction that has ever occurred on the Blockchain. A node would have had to compare each entry line by line while confirming a transaction to ensure that its own records matched exactly with the network records. If there was any discrepancy between the records, it could jeopardize the network's security.

Merkle trees, on the other hand, solve this problem by significantly reducing the amount of data that must be kept for verification purposes. They hash all of the ledger records, effectively separating the proof of data from the data itself. Users can use hashes to check transactions and verify individual blocks. As a result, the amount of computing power required to validate the transactions is reduced.

Eliminates Transactional Modification:

Merkle trees aid in the elimination of transaction record modification and double-spending within a Blockchain. For example, if someone attempts to hack an entry on the Blockchain in order to appear to have more cryptocurrency than is actually available, any such false entry would be inconsistent with the rest of the hashes in a Merkle tree and would thus be rejected by the network.

This is because when a transaction occurs on the Blockchain, it is verified rather than stored. The hash function hashes the transaction and then compares it to every other hash on the Blockchain to ensure that nothing has been changed or tampered with.

Since the hash function is deterministic, it produces the same hash whenever the same input is fed into it. As a result, if a person attempts to double-spend his digital currency, a hash for that transaction will be generated. If that hash matches any of the existing Blockchain records, the transaction is rejected. As a result, double-spending is avoided.

Tamper Detection:

The Merkle tree provides miners with an incredible advantage in determining whether any transactions have been tampered with.

As the transactions are stored in a Merkle tree, which stores the hash of each node in the upper parent node, any changes in the transaction details, such as the amount to be debited or the address to which the payment must be made, will propagate to the hashes in higher levels and finally to the Merkle root. The miner can easily detect tampering by comparing the Merkle root in the header with the Merkle root stored in the data part of a block.

Effective verification:

Merkle trees provide efficient data integrity and validity verification while significantly reducing the amount of memory required for verification. The proof of verification does not necessitate the transmission of a large amount of data across the blockchain network. Allow for the trustless transfer of cryptocurrency in a peer-to-peer, distributed system through quick transaction verification.

Also Read | Network Security: Types, Advantages, and Disadvantages

Conclusion:

A Merkle Tree is designed in such a way that blocks that have been updated with information can be easily transferred from one peer to another without being modified or corrupted in any way. The majority of Merkle Trees have a dual child node system located beneath each node on the network. A Merkle Tree, on the other hand, can have more than two child nodes. The Merkle Tree enables accurate verification of all data in a large set without having to scrutinize every single transaction.

A Merkle Tree, also known as a hash tree, is an essential unit of blockchain technology. It refers to a structure that allows for the efficient verification of all the contents of a large set of information.

This aspect of the technology is critical for ensuring that the verification process is carried out securely. It is used by both the Ethereum and Bitcoin blockchain networks to validate whether a large body of information is accurate and consistent. Merkle Tree is a fundamental component of Blockchain technology that enables its growth in the IT world.

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What is Merkle Tree in Blockchain?

What is the Merkle Tree?

How does the Merkle Tree Work?

Advantages of Merkle Trees in Blockchain

Discrete Value:

Reduces Data:

Eliminates Transactional Modification:

Tamper Detection:

Effective verification:

Conclusion:

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