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Merkle Tree in Crypto: What it is and How it Works?

By:
Andrew Carr
| Editor:
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Updated:
April 9, 2024
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5 min read

A Merkle tree is a fundamental concept in cryptography and computer science. Merkle trees are widely used in blockchain technology to ensure the validity of transactions within a block and efficiently synchronize data across a distributed network of nodes. This enables users to verify the integrity of specific transactions without downloading the entire blockchain.

"Merkle" comes from Ralph Merkle, an American computer scientist who proposed the tree concept in 1979. Merkle is a pioneer in the field of cryptography, and his contributions have significantly impacted how data integrity is maintained in the digital age.

Ralph Merkle. Image source: wikipedia.org

By providing a secure and efficient method for running blockchains, Merkle trees allow users to verify the validity of specific transactions without downloading a record of the entire blockchain.

Merkle Tree Structure Explained

Consisting of Leaf Nodes, Non-Leaf Nodes, and the Merkle Root, each leaf node in the tree is a hash of a block’s transaction data, non-leaf nodes are hashes of their respective child nodes, and the Merkle root is the hash of all blocks. Hashes are alphanumeric (containing letters and numbers) data strings or information used to reference other data points in a network. 

Leaf nodes form the lowest levels of the tree and are individual data points that create non-leaf node hashes, which cascade upwards and form a single hash, the Merkle root. 

So, when it is said that Merkle roots are the hash of all blocks, they are made up of data strings that reference non-leaf nodes, which in turn are parent hashes of leaf nodes that reference individual block transactions. Together, these components mesh to create a cryptographic hash tree.

The Merkle Root is stored in the block header. By comparing the Merkle Root present in the block header to transaction data obtained elsewhere, users can verify the transactions' validity without knowing the entire block's contents. Additionally, any attempted tempering with data stored in the structure can be detected by comparing hashes from the bottom of the tree to the Merkle root. 

Merkle trees can be used to verify data stored, handled, and transferred between computers and summarize all the transactions in a block, helping ensure data integrity and authenticity. 

This makes Merkle trees particularly useful in blockchain systems where data immutability and integrity are paramount. Immutability refers to computational data that cannot be altered or replicated once coded. 

Hashing

Hashing plays a crucial role in the architecture of a Merkle Tree and is the process of converting input data into a fixed-size output string called the hash value. 

This process is performed by a function known as a hash function. To reiterate, hash functions are alphanumeric, consisting of numbers and letters but no special characters. One benefit of hashes is that they always consume less memory than the data they represent.

Hashing is essential for data integrity in a Merkle tree. When a piece of data is hashed, any slight change in the data will produce a dramatically different hash. This property is invaluable for verifying whether the data in a node has been tampered with.

 Every leaf node in a Merkle tree is labeled with the cryptographic hash of a data block, and every non-leaf node is labeled with the cryptographic hash of the labels of its child nodes. This structure allows efficient and secure verification of the contents of a large data structure.

The process of constructing a Merkle tree from leaf nodes to the Merkle root is as follows:

  1. Each piece of data or transaction is hashed, creating leaf nodes.
  1. These hashes are paired and hashed again, generating parent nodes.
  1. This process is repeated, with each level of nodes being paired and hashed until we reach the top of the tree.
  1. The final hash left is the Merkle root, a single hash that represents all transactions.

Demonstrating that a leaf node is part of a given binary hash tree involves computing several hashes proportional to the logarithm—a function that represents an exponent required to produce a specific result in a computation—of the number of leaf nodes in the tree, making Merkle trees an efficient example of a cryptographic commitment scheme.

Hashing is used in blockchain, so every major asset relies on that technology, including, of course, BTC, ETH, SOL, and others. Make sure to get a good Solana Wallet app if you want to get into the crypto sphere.

Expanding on Merkle Roots

Merkle roots serve as a summary of all the information contained in a Merkle Tree, allowing anyone to quickly verify whether a specific piece of information is part of a specified tree. Any change made to the data within the tree leads to a change in the root, making the Merkle root a powerful tool for locating unapproved data modifications.

Generating a Merkle Root

The Merkle Root is a hash value generated by pairing and hashing unique identifiers of individual blocks to form the Merkle Tree structure. Pairs of nodes are hashed repeatedly until only one hash remains. The process is as follows:

  1. Calculate the hash value of each leaf node (individual data blocks).
  2. Pair adjacent leaf nodes and hash their values together.
  3. Repeat the process with the resulting hashes until only one hash remains.

Merkle Tree Vulnerabilities

Merkle trees necessitate additional storage space due to the inclusion of hash values at each level, leading to increased overall storage requirements, notably for large datasets.

Furthermore, constructing and reconstructing Merkle trees can be computationally intensive, especially when handling many data items or frequent updates. 

While Merkle trees facilitate efficient data integrity verification by checking only a few hash values, they present a vulnerability in their root hash, serving as a centralized verification point. If compromised, attackers could manipulate data integrity without detection.

Additionally, while Merkle trees excel in verifying integrity for small to moderate-sized datasets, they encounter scalability issues as the dataset grows larger. The depth of the Merkle tree increases proportionally with the number of data items, potentially affecting verification efficiency.

Second Preimage Attacks

Second preimage attacks within Merkle trees represent cryptographic vulnerabilities where attackers attempt to discover alternative data that hashes to the same value as an existing leaf node within the structure. 

This endeavor involves finding a distinct input that generates an identical hash value to the original leaf node when hashed using the same function as the Merkle tree. By achieving this, the attacker compromises the integrity of the data stored within the Merkle tree.

Here's how a second pre-image attack on a Merkle tree might work:

  1. Initial Setup: The Merkle tree is constructed with leaf nodes representing individual data blocks' hash values.

  2. Target Identification: The attacker selects a specific leaf node in the Merkle tree whose hash value they want to replicate.

  3. Hash Function Collision: The attacker tries to find a different input (a second pre-image) that, when hashed using the same hash function as the Merkle tree, produces the same hash value as the targeted leaf node.

  4. Compromising Integrity: If the attacker finds a second pre-image, they can replace the original data with the manipulated data while keeping the Merkle tree structure intact. Since the Merkle tree relies on the integrity of its hash values, this manipulation may go undetected during verification processes.

Collision Attacks

Merkle trees are not inherently vulnerable to collision attacks because they are a data structure rather than a cryptographic hash function. However, the cryptographic hash functions used to construct Merkle trees can be vulnerable to collision attacks without strong collision resistance properties.

A collision attack occurs when two different inputs produce the same hash value. If an attacker can find such inputs, they can potentially compromise the integrity of the data stored in the Merkle tree by substituting one input for another without detection during verification.

Protecting Against Second Preimage and Collision Attacks: SHA-256

SHA-256, an abbreviation for Secure Hash Algorithm 256-bit, constitutes a widely adopted cryptographic hash function renowned for generating a fixed-size hash value from input data of variable lengths. 

In safeguarding Merkle trees against second pre-image attacks and collision attacks, SHA-256's intrinsic cryptographic properties play a pivotal role. 

SHA-256 employs a sophisticated compression function that operates on input data in blocks, resulting in a unique 256-bit hash value. Its design integrates cryptographic principles like diffusion and confusion, rendering the reverse engineering of specific inputs challenging for attackers. 

Because each leaf node in a Merkle tree houses the hash value of a distinct data block, any effort by an attacker to discover an alternative input yielding the same hash value as a known leaf node necessitates an exhaustive exploration of the input space, making second preimage attacks almost impossible to execute. 

With its 256-bit hash output, SHA-256 boasts an extensive hash space, significantly diminishing the likelihood of two distinct inputs generating identical hash values. Ensuring that even minor alterations in input data yield substantial changes in the resultant hash value, thereby reducing the risk of collision attacks. 

Conclusion

The structure of a Merkle tree, with its leaf nodes, non-leaf nodes, and Merkle root, facilitates efficient data integrity verification. Each leaf node represents a hash of individual data blocks, while non-leaf nodes are hashes of their respective child nodes. The Merkle root, generated through the hashing of all blocks, serves as a concise summary of the entire data structure.

The Merkle tree architecture, like many other technologies, is always evolving. Developers and researchers are constantly exploring new ways to improve the efficiency and security of Merkle trees.

As the adoption of blockchain technology continues to grow, the importance of Merkle trees in maintaining data integrity cannot be overstated. Therefore, the ongoing improvement and evolution of the Merkle tree architecture are essential for the future of blockchain technology.

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