We love trees. Oak trees, fir trees, even those funky-looking Joshua trees—we heart them all. And when it comes to cryptocurrency, our favorite tree of all is definitely the Merkle tree. Merkle trees don’t necessarily provide a lot of shade on a sunny day, but they do make it easier and faster to process cryptocurrency transaction data, which is pretty cool.
Without getting too technical here, it works like this: each block in the blockchain is a leaf. As each leaf is added, it’s hashed and given a hash value. Once we’ve got a bunch of hash values (or leaves), those hash values are mushed together to create one final hash value. This final hash value is called a Merkle root, and it gets stuck into the block header. Now, if we want to verify a transaction, we don’t have to search the whole forest for one particular leaf. In other words, we don’t have to pull up every data record ever and start going through them all one by one. We can just pull up the appropriate tree parts, run a query, and boom—we’ve got our answer.
