Blockchain
A Beginner’s Guide to Merkel Trees in Blockchain
Merkle trees ensure data integrity, efficiency, and scalability within blockchain networks, making them an essential part of this fast-growing technology.
Merkle trees, staples of the computer science ecosystem, have found usage in the cryptocurrency space. Interest in them has recently increased within the crypto sector as a result of the FTX debacle.
This article is an in-depth exploration of Merkle trees in blockchain, explaining what they are, how they work, and their applications in the industry.
What Are Merkle Trees?
A Merkle tree, also a hash tree or a binary hash tree, is a data format with applications in computer science and cryptography.
At its core is the hierarchical layout of data blocks defined by a cryptographic hash. This layered arrangement of data blocks gives it a tree-like appearance.
The concept of Merkle trees is the brainchild of Ralph Merkle, who patented it in 1979, thus its name. They are crucial in safeguarding data purity and security in sectors dealing with large datasets like blockchain.
The Structure of Merkle Trees in Blockchain
To better understand the structure of Merkle trees in blockchain, imagine an upturned tree with three primary levels. At the top is the Merkle root, the non-leaf nodes occupy the middle part, and the leaf nodes are at the bottom.
The leaf nodes are the building blocks of the Merkle tree. They are the hashes of every transaction occurring in a given block. You may know them better as transaction IDs (TXIDs) that are viewable via a block explorer.
Non-leaf nodes, forming the second level of a Merkle tree, are bundles of paired leaf node hashes. They derive their name from the fact that they don’t contain TXIDs. Instead, they only store the transaction hashes of the two leaf nodes making them.
Finally, at the tree’s topmost non-leaf node is the Merkle root. It is a single hash representing all the block’s transactions hashes. The Merkle root is the block’s exclusive identifier and is crucial in verifying its authenticity.
How Do Merkle Trees in Blockchain Work?
Here is how Merkle trees in blockchain work:
Step 1: Transaction Hashing
A cryptographic hash function, say SHA-256, hashes all the transactions in the block. This process produces a unique identity (hash) for each, making that data incorruptible.
Step 2: Pairing the Hashes
The same function pairs and hashes two transaction hashes to create a new one. This pairing and hashing repeats at each level, with each child node forming a new parent node.
Step 3: Formation of the Merkle Root
The last two parent (non-leaf) nodes pair up to form a single hash, the Merkle root. This is the entire block’s cryptographic fingerprint and headlines it.
Step 4: Verifying a Block’s Integrity
You can verify the integrity of a given transaction by obtaining its corresponding hash from the Merkle root. Starting there and following the parent nodes, you can recreate the Merkle root. If the two match, then the transactions in the block are authentic.
Let’s consider a simple example with four transactions, A, B, C, and D, occurring in a given block:
Hashing Transactions: Each transaction is hashed:
hashA = hash(A)
hashB = hash(B)
hashC = hash(C)
hashD = hash(D)
Pairing and Hashing: The hashes are paired and hashed together:
hashAB = hash(hashA + hashB)
hashCD = hash(hashC + hashD)
Creating the Merkle Root: The resulting hashes are hashed together to create the Merkle root:
MerkleRoot = hash(hashAB + hashCD)
Merkle Trees as Proof-of-Reserve
Proof-of-Reserve (PoR) is a bookkeeping practice centralized exchanges (CEXs) and other crypto custodians use to prove their financial health. It’s an open report of the company’s crypto holdings. Calls for PoR audits have grown with the increase in crypto-related fraud cases.
Given that CEXs hold large sums of crypto, Merkle trees are a convenient way of proving their reserves. Here is how they help them achieve that:
Gathering user balances: The CEX or custodian compiles a list of all users and their balances.
Hashing user balances: It then uses a cryptographic function to hash each user’s holdings.
Constructing the Merkle tree: The CEX arranges the hashed user balances in a hierarchical structure. It then hashes these in pairs, forming a Merkle root.
Publishing the Merkle root: The next step is sharing the Merkle root publicly. This activity enables users to verify their balances without revealing the entire list of their credits.
Verification: Users can verify their balances by obtaining their Merkle proofs, which are paths from their balance hashes to the Merkle root.
Why Are Merkle Trees Important for Blockchains?
Merkle trees ensure data integrity, efficiency, and scalability within blockchain networks. By hashing individual transactions and combining them into a Merkle root, they create a tamper-proof identifier for each block. So, any correction to a transaction alters the Merkle root, alerting the network of potential tampering.
Moreover, they help in achieving verification efficiency. Users can quickly check a transaction’s probity by comparing its hashes with those in the Merkle tree. Furthermore, they don’t need to download and compare entire blocks.
They also contribute to a blockchain’s scalability by reducing data transmission and verification requirements. This way, they help improve the network’s performance. Besides, they minimize storage needs by storing only the Merkle root and relevant transaction hashes. Thus, they benefit nodes with limited storage capacity.
Source: unchainedcrypto.com
The post A Beginner’s Guide to Merkel Trees in Blockchain appeared first on HIPTHER Alerts.
Codego enables effortless fund transfers across 33 countries with SEPA or SEPA Instant, providing a secure and seamless gateway to international payments.
Codego, a licensed EMI/Virtual Asset Operator and banking innovator, has announced the launch of its groundbreaking Cryptogateway solution for merchants. This new platform sets a global standard in digital payment technology, offering unparalleled functionality for both in-person and remote transactions.
The Future of Payments Is Here
Codego’s Cryptogateway enables merchants to accept cryptocurrency payments seamlessly from customers while receiving funds instantly in their IBAN accounts. Accepting payments in Bitcoin, Litecoin, Dogecoin, Ethereum, USDT, and USDC from customers, while allowing merchants to receive settlements in 35 fiat currencies directly into their preferred IBAN accounts, with zero transaction fees, the solution delivers instant, borderless, and cost-effective payment processing.
Merchants can create multiple Terminal IDs at no cost, making it easy to manage different business locations or divisions. This flexibility, combined with cutting-edge technology, ensures a user-friendly experience for businesses of all sizes.
Why Codego’s Cryptogateway Is the Ultimate Solution
The solution is ideal for industries such as gambling and forex, enabling customers to deposit in cryptocurrencies and ensuring instant settlement of funds directly to merchants’ IBAN accounts.
– Zero Fees: Merchants pay no commissions on transactions, maximizing their revenue.
– Instant Settlement: Payments are processed and funds are available instantly, reducing cash flow delays.
– Global Reach: Supports 35 cryptocurrencies, enabling businesses to cater to a wider audience.
– Easy Integration: Multi-terminal setups at no cost ensure seamless adoption.
– Licensed and Secure: Codego operates under EMI/Virtual Asset and banking licenses in multiple jurisdictions, ensuring full regulatory compliance.
“Codego’s Cryptogateway is not just another payment solution; it’s a revolution in how businesses interact with digital assets. We’re empowering merchants to embrace the future of payments without complexity or excessive costs,” saidSimone Binotto Torre, Chief Operating Officer, Codego.
A Trusted Global Partner in Financial Innovation
Codego is renowned for its pioneering role in the financial technology landscape. With banking licenses across multiple countries and a reputation for providing White Label IBAN bank accounts to emerging neobanks, Codego continues to drive innovation. The company operates 11 branches globally, spanning Europe, the Middle East, the United States, and now Oceania. Its expansion reflects a commitment to bringing cutting-edge solutions to every corner of the globe.
Redefining Merchant Solutions
This Cryptogateway launch is part of Codego’s ongoing mission to revolutionize financial services through innovation. From supporting neobanks with White Label solutions to creating customer-centric payment platforms, Codego’s expertise ensures merchants stay ahead in an ever-evolving market.
The post Codego Revolutionizes Merchant Payments with New Cryptogateway Solution appeared first on News, Events, Advertising Options.
Blockchain
Dizzaract Studio Founder Predicts AI Supercycle by 2025; VanECK estimates one million New AI Agents by end of the year
Ilman Shazhaev, founder of Dizzaract Game Studio, predicts that by the end of 2025, Web3 gaming will enter an AI-driven supercycle, where in-game economies will reflect real-world market dynamics powered by AI.Ilman suggests that AI agents will play a key role in this transition, enabling more personalized gaming experiences.
Since October 2024, AI agents have swarmed social media platform X, pumping nearly a dozen more coins past $100-million market capitalizations, largely on Solana. According to Santiment — crypto analytics platform, the launch of AI agent $NOTAI has been one of most talked AI narratives on X this week.
In addition to it, a recent VanECK report also highlights that by the end of 2025, over 1M new AI agents will be deployed, while the total AI agents’ market cap is about $9.72B according to Coingecko data. Additionally, former messari research Kel Eleje analyst also speculates that total market cap for AI agents and technology could rally as high as $250 billion.
Earlier this week, Dizzaract made headlines with its studio launch in the Middle East, where it now employs 160 people. The studio has introduced patented AI frameworks designed to transform traditional gameplay into adaptive, interactive experiences. Dizzaract holds registered patents for an ‘Adaptive Machine Learning Framework for Gaming Assistance’ and a ‘Personalized AI Learning and Training Framework for Gaming Systems.’
On this note, I would like to share comment from Ilman Shazhaev, Founder of Dizzaract Game Studio “I firmly believe that in 2025, gaming will enter what I call the “AI Supercycle.” We’ll see a surge of games that no longer rely on pre-written scripts but instead respond dynamically to players’ actions, decisions, and even emotions in real time. AI is transforming games into adaptive, living worlds that blur the line between gameplay and real life.AI agents will play a central role in this transformation, going beyond automation to offer highly personalized experiences. They’ll analyze player behavior, adjust strategies, and even act as in-game coaches, tailoring challenges and decisions in real time.
In Web3 games, AI agents can manage in-game economies, providing real-time insights and keeping systems dynamic and responsive. By 2025, digital ownership will no longer be optional — it will be a core expectation. Players will own their in-game assets and identities, transferring achievements seamlessly across games while participating in economies that mirror real-world markets. By 2025, digital ownership will no longer be optional — it will be a core expectation. Players will own their in-game assets and identities, transferring achievements seamlessly across games while participating in economies that mirror real-world markets. AI-driven Web3 games will dominate the market by combining immersive gameplay with decentralized economies. In-game economies, powered by AI, will be as dynamic and complex as real-world markets. These games will transcend entertainment, becoming cultural movements where players act as evangelists, with AI-powered avatars serving as extensions of their digital identities.”
The post Dizzaract Studio Founder Predicts AI Supercycle by 2025; VanECK estimates one million New AI Agents by end of the year appeared first on News, Events, Advertising Options.
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