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The Merkle tree is a way to organize and structure large amounts of data to simplify processing. In the case of cryptocurrencies and blockchains, the Merkle tree is used to structure transaction data so that it does not require large resources.
When a cryptocurrency transaction is executed in a Merkle tree, it is hashed and gets an equivalent hash value. After each transaction has been deleted in the Merkle tree, the resulting hash values are combined with another hash value and then submitted to the hash again.
For example, the “AB” and “AC” hash values are combined to create “ABC”.
This process of pairing hash values is repeated until a final hash value is obtained. The final hash value, the Merkle root, provides a summary of all the transactions it contains. The Merkle root summary is then inserted into the block header.
The Merkle tree structure provides easy access to transaction records in a block. This makes it easy to check whether the data in the block has been changed or tampered with. This is true because any change to the transaction (or any other related data) in the Merkle tree will result in a completely different corresponding Merkle root.
Efficient use of resources
If cryptocurrencies do not use Merkle trees, each verification request will include an enormous amount of information transmitted over the network. Structuring transaction data in the Merkle tree is a much more efficient use of resources.
The verification of a transaction does not require a complete copy of the register, since the transaction hash data can be verified in the Merkle root, which requires a much smaller amount of information transmitted on the nodes and therefore less processing power, to analyze the overall data integrity.
In other words, the Merkle tree structure allows users to verify that a single transaction has been included in a block, without the need to load the entire blockchain. This technology is an important cryptocurrency tool for organizing data transactions and working as effectively as possible. Without Merkle trees, it is likely that a greater demand for resources will result in fewer nodes on the network.