A Merkle tree (or hash tree) is a data structure used in cryptography and blockchain technology to efficiently verify and secure large amounts of data. It organizes data into a tree-like structure where each leaf node represents a hash of a data block, and each parent node is a hash of its child nodes, ultimately leading to a single Merkle root.

How a Merkle Tree Works

1. Data Hashing: Each piece of data (e.g., transactions in a block) is hashed.
2. Pairwise Hashing: Hashes are grouped in pairs and hashed again.
3. Recursive Hashing: This process continues until a single hash (Merkle root) is reached.
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Benefits of Merkle Trees

• Efficient Data Verification: You can verify data without storing the entire dataset.
• Security: Changing even a single data entry alters the entire tree structure.
• Scalability: Useful for handling large sets of transactions in blockchains.
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Use Cases in Blockchain

• Bitcoin & Ethereum: Used to structure transaction data in blocks.
• Proof of Inclusion: Allows light clients to verify transactions efficiently.
• Airdrops & Whitelists: Merkle trees are used for verifying eligible addresses without revealing the full list.