Merkle Tree

Merkle Tree as the name suggests is a diagram of data that looks like an inverted tree. The transactions which need to be summarized, verified and secured represent the leaves (top portion) of the tree. Each transaction is identified with a ‘hash’ which is a set of numbers and alphabets that make up a unique ID. A set of two ‘hashes’ are linked together to form an intermediate hash which then looks like a branch of the tree. When an entire set of transactions are combined and sorted with this mechanism, it will result in a single hash called the ‘Merkle root’ at the top of the tree. The advantages of Merkle Tree mechanism are: • Reduces CPU processing time • Ensured better security