What is the Merkle Tree?

1. What is a Merkle Tree?

A Merkle tree is an encryption tool that consolidates a large amount of data into a single hash value. This hash value is referred to as the Merkle tree root, and it is an encrypted field generated by summarizing all input information. Therefore, users can use the Merkle tree to verify specific content in a particular "sealed" dataset. In our proof of reserve evaluation, we use these properties of the Merkle tree to confirm if individual user accounts are included in the auditor's examined liability report.

 

2. Principles of a Merkle Tree

• The tree-like data structure of root nodes and child nodes organizes all data processing hierarchically.
• In the process of transmitting data results from bottom to top, verification is required between adjacent nodes. Verification failure prevents further progress.
• Using hash algorithms, block data is encoded into hash values, and any change in block data results in a change in the hash value.
• Even with explosive data growth, the root node is responsible for recording the hash values of all child nodes, and child nodes can be infinite.

The Merkle tree establishes a logically rigorous and interconnected data structure, where the data of each child node directly impacts changes in the root data, ensuring that there are no errors or omissions during data computation.

 

3. Verification Principle

CoinCatch calculates the hash values of parent nodes from a user's leaf node to the root node and compares the root node's hash value with the hash value. In the Merkle tree of the verification process, if they match, the verification is successful; if they don't match, the verification fails.

 

4. Verification Steps

Step 1 - Log in to your CoinCatch account and click "100% Proof of Reserves" in the footer bar on the homepage to access the asset proof page where you can directly view the latest reserve ratio.

 

 

Step 2 - Click on "User Assets Proof" to perform asset verification. Choose the snapshot generation date you desire and click "Verify Now."