Merkle tree

A Merkle tree is a data structure that hashes pairs of records together, over and over, until every transaction in a block boils down to one short code called the root. It matters because it lets anyone check that a single transaction is included in a block without downloading the whole thing, which keeps light wallets fast and blockchains verifiable. Bitcoin uses this trick: a block might hold 2,000 transactions, but its header stores just one 32-byte Merkle root. If you want proof your payment is in that block, you only need a handful of neighboring hashes, not all 2,000 transactions, to confirm the root matches.