Merkle Tree, also known as Hash Tree, is a technology for efficient data integrity in decentralised systems. Named after the American computer scientist and cryptographer Ralph Merkle, Merkle trees are often used in blockchain systems.
The Merkle Tree represents data in smaller records (hash value) within a tree structure. This arrangement allows the integrity of the entire data set to be verified based on the small sets of hash values. This is particularly useful in distributed systems where it is critical that data is secure and immutable without the need for a central system to verify integrity.
Merkle Tree Structure
A Merkle Tree is a branching structure of transaction information or hashes arranged in a tree structure. The data tree consists of "leaves" representing data and inner nodes that aggregate hash values of that data. Each node has a hash value calculated from the hash values of its children. The main components of a Merkle tree are
Each leaf represents a block of data, such as a transaction in a blockchain.
- Hash values
The algorithm hashes each data block, and these hash values serve as "child nodes" (see the second level from the bottom in the diagram) for the next level of the tree.
- Inner nodes
The hash values of the child nodes are hashed again and used as parent nodes for the next level. This process continues until a single hash value is left, known as the 'root node' (or 'root hash' in the diagram).
The setup of a Merkle Tree / source: ResearchGate
Application in blockchain
In the realm of blockchain, Merkle Tree play a crucial role in securing and improving the efficiency of the transaction data. Transaction data is actively collected and stored in a block. Each transaction is represented by a cryptographically derived hash value and organised in a tree structure. The Merkle Root is stored as the block header, enabling unique and efficient verification of all transactions. This structure not only streamlines the data verification process, but also significantly enhances security. Any change to the transactions causes the Merkle Root to be invalid, effectively preventing any potential manipulation of the data.
The representation of transaction data in hashs allows network participants to quickly and efficiently verify the validity of a block without having to examine all other transactions. In addition, the cryptographic nature of the hash function ensures that even minor changes to the data have an immediate effect on the Merkle Root, providing a robust security measure against attacks and tampering.