A Merkle treeMerkle Tree is a methodology used to validate data structure and ensure data authenticity. The primary goal of this methodology... Read More is a way of organizing and structuring large amounts of data to make it more straightforward to process. In the case of cryptocurrencyA digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by... and blockchainA blockchain is a distributed database that is shared among the nodes of a computer network. Read More, the Merkle tree is used to structure transaction dataTransaction data is information that is stored on the blockchain and represents a record of a transaction. This data can... Read More in a way that is less demanding on resources.
When a cryptocurrency transactionA cryptocurrency transaction is a digital exchange of value that uses cryptography to secure the transaction and control the creation... Read More is made in a Merkle tree structure, it is hashed and then given an equivalent hash valueA hash value is the product of a hashing algorithm applied to original data to create a unique numerical value... Read More. After each transactionA transaction is a record of an event that occurred in the past. Transactions typically occur during the course of... Read More is hashed in the Merkle tree, the hashA “hash” is a fixed-length alphanumeric code that is used to represent words, messages and data of any length. Crypto... Read More values that are produced are paired with another hash value and then hashed again. For example, the hash values ‘AB’ and ‘AC’ are combined to create ‘ABC’.
This process of pairing hash values is repeated until a final hash value is produced. 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 blockGroups of data within a blockchain. On cryptocurrency blockchains, blocks are made up of transaction records as users buy or sell... Read More header.
