Merkle tree ethereum coin

What is a Merkle Tree?

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Merkle trees are a fundamental part of what makes blockchains tick. Although it is definitely theoretically possible to make a blockchain without Merkle trees, simply by creating giant block headers that directly contain every transaction, doing so poses large scalability challenges that arguably puts the ability to trustlessly use blockchains out of the reach of all but the most powerful computers in the long term.

Thanks to Merkle trees, it is possible to build Ethereum nodes that run on all computers and laptops large and small, smart phones, and even internet of things devices such as those that will be produced by Slock. So how exactly do these Merkle trees work, and what value do they provide, both now and in the future? A Merkle tree, in the most general sense, is a way of hashing a large number of "chunks" of data together which relies on splitting the chunks into buckets, where each bucket contains only a few chunks, then taking the hash of each bucket and repeating the same process, continuing to do so until the total number of hashes remaining becomes only one: The most common and simple form of Merkle tree is the binary Mekle tree, where a bucket always consists of two adjacent chunks or hashes; it can be depicted as follows:.

So what is the benefit of this strange kind of hashing algorithm? Why not just concatenate all the chunks together into a single big chunk and use a regular hashing algorithm on that? The answer is that it allows for a neat mechanism known as Merkle proofs:.

A Merkle proof consists of a chunk, the root hash of the tree, and the "branch" consisting of all of the hashes going up along the path from the chunk to the root. Someone reading the proof can verify that the hashing, at least for that branch, is consistent going all the way up the tree, and therefore that the given chunk actually is at that position in the tree. The application is simple: Then, a user who wants to do a key-value lookup on the database eg. It allows a mechanism for authenticating a small amount of data, like a hash, to be extended to also authenticate large databases of potentially unbounded size.

The original application of Merkle proofs was in Bitcoin, as described and created by Satoshi Nakamoto in The Bitcoin blockchain uses Merkle proofs in order to store the transactions in every block:. The benefit that this provides is the concept that Satoshi described as "simplified payment verification": If the light client wants to determine the status of a transaction, it can simply ask for a Merkle proof showing that a particular transaction is in one of the Merkle trees whose root is in a block header for the main chain.

This gets us pretty far, but Bitcoin-style light clients do have their limitations. One particular limitation is that, while they can prove the inclusion of transactions, they cannot prove anything about the current state eg. How many bitcoins do you have right now? A Bitcoin light client can use a protocol involving querying multiple nodes and trusting that at least one of them will notify you of any particular transaction spending from your addresses, and this will get you quite far for that use case, but for other more complex applications it isn't nearly enough; the precise nature of the effect of a transaction can depend on the effect of several previous transactions, which themselves depend on previous transactions, and so ultimately you would have to authenticate every single transaction in the entire chain.

To get around this, Ethereum takes the Merkle tree concept one step further. Every block header in Ethereum contains not just one Merkle tree, but three trees for three kinds of objects:. This allows for a highly advanced light client protocol that allows light clients to easily make and get verifiable answers to many kinds of queries:.

The first is handled by the transaction tree; the third and fourth are handled by the state tree, and the second by the receipt tree. The first four are fairly straightforward to compute; the server simply finds the object, fetches the Merkle branch the list of hashes going up from the object to the tree root and replies back to the light client with the branch.

The fifth is also handled by the state tree, but the way that it is computed is more complex. Here, we need to construct what can be called a Merkle state transition proof. Essentially, it is a proof which make the claim "if you run transaction T on the state with root Sthe result will be a state with root S'with log L and output O " "output" exists as a concept in Ethereum because every transaction is a function call; it is not theoretically necessary.

To compute the proof, the server locally creates a fake block, sets the state to S, and pretends to be a light client while applying the transaction.

That is, if the process of applying the transaction requires the client to determine the balance of an account, the light client makes a balance query. If the light client needs to check a particular item in the storage of a particular contract, the light client makes a query for that, and so on. The server "responds" to all of its own queries correctly, but keeps track of all the data that it sends back. The server then sends the client the combined data from all of these requests as a proof.

The client then undertakes the exact same procedure, but using the provided proof as its database ; if its result is the same as what the server claims, then the client accepts the proof.

It was mentioned above that the simplest kind of Merkle tree is the binary Merkle tree; however, the trees used in Ethereum are more complex - this is the "Merkle Patricia tree" that you hear about in our documentation. This article won't go into the detailed specification; that is best done by this article and this onethough I will discuss the basic reasoning.

Binary Merkle trees are very good data structures for authenticating information that is in a "list" format; essentially, a series of chunks one after the other. For transaction trees, they are also good because it does not matter how much time it takes to edit a tree once it's created, as the tree is created once and then forever frozen solid. For the state tree, however, the situation is more complex.

The state in Ethereum essentially consists of a key-value map, where the keys are addresses and the values are account declarations, listing the balance, nonce, code and storage for each account where the storage is itself a tree. For example, the Morden testnet genesis state looks as follows:. Unlike transaction history, however, the state needs to be frequently updated: What is thus desired is a data structure where we can quickly calculate the new tree root after an insert, update edit or delete operation, without recomputing the entire tree.

There are also two highly desirable secondary properties:. The Patricia treein simple terms, is perhaps the closest that we can come to achieving all of these properties simultaneously. The simplest explanation for how it works is that the key under which a value is stored is encoded into the "path" that you have to take down the tree.

Each node has 16 children, so the path is determined by hex encoding: In practice, there are a few extra optimizations that we can make to make the process much more efficient when the tree is sparse, but that is the basic principle. The two articles mentioned above describe all of the features in much more detail.

Toggle navigation Ethereum Blog. The most common and simple form of Merkle tree is the binary Mekle tree, where a bucket always consists of two adjacent chunks or hashes; it can be depicted as follows: The answer is that it allows for a neat mechanism known as Merkle proofs: Merkle Proofs in Bitcoin The original application of Merkle proofs was in Bitcoin, as described and created by Satoshi Nakamoto in The Bitcoin blockchain uses Merkle proofs in order to store the transactions in every block: A hash of the previous header A timestamp A mining difficulty value A proof of work nonce A root hash for the Merkle tree containing the transactions for that block.

Merkle Proofs in Ethereum Every block header in Ethereum contains not just one Merkle tree, but three trees for three kinds of objects: Transactions Receipts essentially, pieces of data showing the effect of each transaction State This allows for a highly advanced light client protocol that allows light clients to easily make and get verifiable answers to many kinds of queries: Has this transaction been included in a particular block?

Tell me all instances of an event of type X eg. Does this account exist? Pretend to run this transaction on this contract. What would the output be? Patricia Trees It was mentioned above that the simplest kind of Merkle tree is the binary Merkle tree; however, the trees used in Ethereum are more complex - this is the "Merkle Patricia tree" that you hear about in our documentation.

For example, the Morden testnet genesis state looks as follows: There are also two highly desirable secondary properties: The depth of the tree is bounded, even given an attacker that is deliberately crafting transactions to make the tree as deep as possible.

Otherwise, an attacker could perform a denial of service attack by manipulating the tree to be so deep that each individual update becomes extremely slow.

The root of the tree depends only on the data, not on the order in which updates are made. Making updates in a different order and even recomputing the tree from scratch should not change the root.

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Merkle Tree also known as 'hash tree' is a data structure in cryptography in which each leaf node is a hash of a block of data, and each non-leaf node is a hash of its child nodes. It is a generalization of hash lists and hash chains. The most common and simple form of Merkle tree is the binary Mekle tree, where a node always consists of two adjacent chunks or hashes.

It is a kind of 'hash tree' where every single node of the tree is the hash of the two nodes below it. However, a Merkle tree can be created as an n-nary tree, with n children per node. Here, we see an input of data is broken up into blocks labeled L1, L2, L3 and L4. Each of these blocks are hashed using some cryptographic hash function.

Then each pair of nodes are recursively hashed until we reach the root node, which is a hash of all nodes below it. SHA-2 is the most popular cryptographic hash function.

If the hash tree only needs to protect against unintentional damage, CRCs can be used too. The benefit of this hashing algorithm is that it allows for a neat mechanism known as Merkle proofs. A Merkle proof consists of. Someone reading the proof can verify that the hashing at least for that branch , is consistent going all the way up the tree, and therefore that the given chunk actually is at that position in the tree.

Example, a user wants to do a key-value lookup on the database eg. Merkle Trees protocol allows for efficiently verifiable proofs that a transaction was included in a block. In this situation, Merkle Trees protocol helps. It allows data to store in smaller chunks hash of hash. So, instead of downloading the entire block; all we download is the Merkle branch that verifies that hashes inside of the branch is consistent.

You can verify the Merkle branch with block header. It is basically taking help of miners to verify that this piece of state is what it is saying. In distributed peer-to-peer network, the same data exists in multiple locations and hence data verification is very important.

Merkle trees allow efficient and secure verification of the contents in distributed systems. This is efficient because it uses hashes instead of full files. Hashes are ways of encoding files that are much smaller than the actual file itself. Merkle tree allows a simpler mechanism for authenticating a small amount of data like hash, as well as authenticate large databases of potentially unbounded size.

The original application of Merkle proofs was in Bitcoin, as described and created by Satoshi Nakamoto in The Bitcoin blockchain uses Merkle proofs in order to store the transactions in every block.

Currently, it is used in few other peer-to-peer networks such as Ethereum, Tor, and Git. In blockchain, every block contains few hundreds of transactions data. If someone needs to verify existence of a specific transaction in a block, then he doesn't have to download the entire block. Downloading a set of branch of this tree which contains this transaction is enough. We check the hashes which are just going up the branch relevant to my transaction. If these hashes check out good, then we know that this particular transaction exist in this block.

An byte chunks of data belonging to a single block which is hashed repeatedly to create proof of work is called as block header. It contains five things:. If the light client wants to determine the status of a transaction, it can simply ask for a Merkle proof showing that a particular transaction is in one of the Merkle trees whose root is in a block header for the main chain.

A block in the ethereum blockchain consists of a header, a list of transactions, and a list of uncle blocks. Included in the header is a transaction root hash, which is used to validate the list of transactions. Transactions are sent over the wire from peer to peer as a simple list. They must be assembled into a special data structure called a trie to compute the root hash.

Uncle blocks are the stale blocks re-included in the blockchain. The state in header needs to be frequently updated: This is needed for clients accessing blockchain to verify data with a little low memory device such as mobile phone. Creating Ethereum system without Merkle tree could be like creating giant block headers that directly contain every transaction. This could have posed large scalability challenges and in long term making it out of reach of all except for the most powerful computers in the world.

The concept of Merkle tree is introduced in Ethereum to allow for compact and efficiently verifiable proofs that a transaction was included in a block. This is already in existing in Bitcoin. Ethereum takes the Merkle tree concept of Bitcoin implementation a step further. Every block header in Ethereum contains not just one Merkle tree, but three trees for three kinds of objects:. This allows for a highly-advanced light client protocol that allows light clients to easily make and get verifiable answers to many kinds of queries:.

Tell me all instances of an event of type X eg. Pretend to run this transaction on this contract. What would the output be? Merkle tree used in Ethereum is more complex than simple binary Merkle tree.

Patricia Tree provide a cryptographically authenticated data structure that can be used to store all key, value bindings, although for the scope of this paper we are restricting keys and values to strings to remove this restriction, just use any serialization format for other data types. A Patricia tree is a binary radix tree also known as radix trie. It is a data structure that represents a space-optimized trie digital tree in which each node that is the only child is merged with its parent.

To implement Particia tree in Ethereum, couple of modification are introduced to boost efficiency. In a normal radix tree, a key is the actual path taken through the tree to get to the corresponding value.

That is, beginning from the root node of the tree, each character in the key tells you which child node to follow to get to the corresponding value, where the values are stored in the leaf nodes that terminate every path through the tree. In Ethereum, hexadecimal is used - X characters from an 16 character "alphabet". Hence nodes in the trie have 16 child nodes the 16 character hex "alphabet" and a maximum depth of X.

A hex character is referred to as a 'nibble'. To receive weekly newsletter, subscribe here. Stay up to date! Merkle Tree Merkle Tree also known as 'hash tree' is a data structure in cryptography in which each leaf node is a hash of a block of data, and each non-leaf node is a hash of its child nodes. Benefits and Utility The benefit of this hashing algorithm is that it allows for a neat mechanism known as Merkle proofs. It contains five things: A hash of the previous header A timestamp A mining difficulty value A proof of work nonce A root hash for the Merkle tree containing the transactions for that block.

Merkle Tree Protocol in Ethereum Creating Ethereum system without Merkle tree could be like creating giant block headers that directly contain every transaction. Every block header in Ethereum contains not just one Merkle tree, but three trees for three kinds of objects: Transactions Receipts essentially, pieces of data showing the effect of each transaction State Fig: Block Header in Ethereum This allows for a highly-advanced light client protocol that allows light clients to easily make and get verifiable answers to many kinds of queries: Has this transaction been included in a particular block?

Merkle Patricia tree Merkle tree used in Ethereum is more complex than simple binary Merkle tree. An example of a radix tree Source: Wikipedia A Patricia tree is a binary radix tree also known as radix trie. Enigma Technology Ethereum MerkleTree blockchain patriciatree.

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