The Merkle tree is a fundamental part of blockchain technology. Blockchain records information in such a way that it is almost impossible to change, hack or cheat the system. Blockchain is a digital ledger of transactions. It is duplicated and distributed across the entire network of computer system. Therefore, Merkle tree is used to summarize all these transactions in a block.
Simply, it can be said that the Merkle tree is a mathematical data structure composed of hashes of different blocks of data, thus it empowers efficient and secure verification of content in a huge scale of data.
Formation of the Merkle Tree
The Merkle trees have hashing pairs of nodes and this is formed by repeating hashing pairs of nodes over and over until there is only a single hash is remaining. This single hash is called the Root Hash, or the Merkle Root. The arrangement or formation is from the bottom up, from hashes of individual transactions which is called as Transaction IDs.
Basically, it is a tree structure in which each leaf node is a hash of a block of data, and each non-leaf node is a hash of its children. Thus, the Merkle trees have a branching factor of 2 that means each node can have 2 children.
Applications of the Merkle Tree
In the digital era of technology, the Merkle tree data structure has many applications, especially in the Bitcoin and crypto technologies.
- The Merkle tree is one of the most effective data structures used for data integrity verifications.
- One should know about the working of hash function for particular understanding the proper functioning of the Merkle Tree. A hash function maps an input to a fixed output and this output is called Hash. The output is unique for every input and this enables fingerprinting of data. So, large amounts of data can be easily identified through their hash. This is called binary merkle tree where the top hash is a hash of the entire tree.
- The structure of the tree allows efficient mapping of huge data and small changes made to the data can be easily identified.
- If somebody wants to identify where data change has occurred then he/she can check whether data is consistent with root hash and then there is no need to traverse the entire structure but only a small part of the structure.
- The root hash is used as the fingerprint for the entire data.
- The Merkle trees play a key role in distributed systems where same data should exist in multiple places.
- Widely used in bitcoin and blockchain.
- The Merkle trees can be used to determine inconsistencies between replicas of whole databases.