Merkle Tree

A binary tree data structure used to efficiently verify and summarize large sets of data, such as transactions in a blockchain.

What is Merkle Tree?

A Merkle Tree is a cryptographic data structure used in blockchains like Ethereum and Bitcoin to organize and verify large datasets, such as transactions in a block, in an efficient and secure manner. It is a binary tree where the leaf nodes store hashes of individual data elements (e.g., transaction IDs), and each parent node contains the hash of its child nodes, culminating in a single hash called the Merkle Root at the top. This structure allows for quick verification of data integrity and consistency without needing to process the entire dataset.

In Ethereum, Merkle Trees are used to store and verify transactions within a block. By organizing transaction hashes into a tree, nodes can efficiently confirm whether a specific transaction is included in a block by checking a small subset of hashes (a Merkle proof) rather than the entire block. This reduces computational overhead and enables light clients, which don’t store the full blockchain, to verify transactions securely. Merkle Trees are critical for Ethereum’s scalability and security, ensuring that large volumes of transaction data can be summarized and validated with minimal resources.