Leaf nodes contain hashes of individual transactions
Internal nodes contain hashes of their child nodes
Root node (Merkle root) represents the entire block's data Importance:
Efficient Verification: Can verify any transaction without downloading the entire block
Data Integrity: Any change in transactions changes the Merkle root
Scalability: Enables light clients to verify transactions with minimal data
Quick Synchronization: Nodes can quickly identify differences between block versions Example: With 4 transactions [T1, T2, T3, T4], the tree structure allows verifying T1 by only knowing Hash(T2), Hash(T3,T4), making verification O(log n) instead of O(n).
Rewriting in plainer words…
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