Saga is a Layer 1 blockchain protocol that allows developers to design their own dedicated chains for running applications. Learn more in this article.

 universe right now is the lack of accessible tools for developers. Many people interested in designing new 

 projects struggle to find the right software developer kits (SDKs) for their projects. The Saga ecosystem aims to fix this issue by providing unparalleled support to app and game developers. 

Can the Saga ecosystem really become the premier chain for web3 development? Keep reading to learn how it works and see whether it's likely to attract new developers.

 blockchain protocol. It allows developers to design their own dedicated chains for running applications. People who work on Saga all share the same security, scaling solutions and SDKs, but they each get their own unique chain that they can customize to suit their needs.

 of technology, crypto and finance enthusiasts. CEO Rebecca Liao is a co-founder of the Skuchain project, the designer of the 

 and a former international corporate attorney. Other members of the founding team include former Tendermint executive Jin Kwon, Blocktech Ventures founder Bogdan Alexandrescu and 

. They realized that there was a major need for a development-focused blockchain specifically designed for game project development. Saga's mission has attracted many major investors, 

Saga aims to create a new system for web3 project developers. Currently, most developers have to choose between the ease of working on an established chain like 

 versus the convenience and customization of designing their own chain. The Saga team realized that the most effective option for game developers would actually be a combination of the two types of development environments.

Saga wants to let developers set up their own sovereign blockchain so they can decide how things like 

 and transaction fees work. However, Saga also aims to provide extensive support for developers in its ecosystem. Its underlying framework ensures that people still have excellent security and a reliable validator set, no matter what their gaming project is.

 ecosystem, whose interchain web development standard is a set of protocols that allows a broad variety of blockchains to communicate with each other. The Saga network uses the 

 and the shared security system of the Cosmos ecosystem to manage the network, and has created its own Layer 1 chain that runs the entire Saga ecosystem and can do things like automatically launching 

The Saga Mainnet handles each developer's compiled smart contract binary. However, it also runs parallel dedicated chains that function as virtual machine (VM) modules capable of handling a specific set of smart contracts. End users for blockchain games and other apps interact only with the dedicated blockchain, while the developer's system manages the fees and individual transactions on the Saga Mainnet.

All of the chains on Saga are validated through optimistic coordination, which requires every Saga validator to validate each chain in the Saga ecosystem via 

 validation, verifying transactions by temporarily locking Saga tokens.

The Saga network contains a lot more than just the basic features offered through the Cosmos SDK and ecosystem. In addition to the software development tools and helpful interface for Saga's validators and developers, the ecosystem also contains the following features.

The overall layout of the Saga ecosystem starts with the Saga Mainnet. Built on the Cosmos hub, this framework includes a full validator set and a dedicated blockchain for handling all smart contracts. The basic protocols are passed on to each child chain in the system, and information is relayed back and forth between the main chain and all of the secondary chains. Saga's validators stake tokens, and then check to make sure every element of the topology follows Saga’s regulations.

 are a method for creating a dedicated blockspace that a developer can manage. These chainlets function as virtual machines that can handle smart contracts and automatically launch Celestia rollups. Each chainlet is its own blockchain that handles nothing but a specific gaming project. Developers decide on the gas fees they'll charge users, and can add chainlets as their projects expand and require more throughput from the remaining validators.

Saga's shared security relies on both the Cosmos hub and its own set of validators to secure the network. Validators on Saga’s network are monitored by auditors who can catch potential issues with individual dedicated chains. If anyone in the validator set fails to properly confirm a smart contract, their staked tokens are automatically confiscated.

 is a publishing system for gaming developers who want to create their own blockchains with help from Saga. It offers infinite scalability, seamless 

 and transactions without gas fees. In addition to use of the Cosmos SDK, developers who choose to publish their game through Saga Origins receive access to a variety of helpful marketing and distribution tools.

 is an interconnected blend of all the developers and projects in the Saga system. Though each sovereign blockchain is fully independent of others, they all join together to offer users a variety of exciting web3 projects. People interested in checking out the latest blockchain designs can join the Multiverse and browse all the neat concepts built on Saga.

To help get the Saga validator system started, Saga released 

 to its community members. People were eligible for the 

 if they had participated in the staking program or played in tournaments to promote Saga ecosystem games. The airdrop eligibility period required remaining validators and other participants to be active between January and October of 2023. Once the airdrop began allowing people to claim tokens, it continued to run until Mar 27, 2024.

 consists of four separate phases. The company has already completed the Andromeda and Cassiopeia phases, which focused on designing the Mainnet and setting up the system of Saga validators. Currently, the Saga team is in the Pegasus phase, which is about releasing tokens and opening the Saga Mainnet to the public. Sometime in late 2022, Saga’s team hopes to reach their Mainnet V2 phase, which will prioritize a new version of the Saga Mainnet with more features and options for dedicated blockspace.

SAGA tokens are the primary method for paying fees on the Saga network. These tokens are also used for staking, and function as a method of confirming Saga transactions. There are a total of 

, of which around 90 million have thus far been released. Saga plans to distribute its tokens as follows:

SAGA is still in the early stages of its token launch. However, it’s already surprised investors, having debuted at $4.91 on Apr 9, 2024 before quickly surging to its ATH to date of $7.60. It then steadily declined over the next few days to its current price of $3.06 as of Apr 19, 2024.

 SAGA, with its experts believing SAGA’s price will reach $15.73 by 2025 and decrease in 2027 to $6.27, before rising again to $13.45 by 2030. This bullish sentiment is amplified by analysts at Changelly, 

 SAGA’s price will increase to $6.91 in 2025, $14.21 in 2027 and $44.36 in 2030.

Looking to trade Saga tokens? Bybit now offers SAGAUSDT Perpetual contracts. To get started, you’ll first need to 

, then fund it with cryptocurrency and navigate to the 

SAGA has done an extremely impressive job of attracting users, and seems poised to become the big coin debut of April 2024 with its high price.

However, it's hard to say whether SAGA can maintain its price in the long run. It's quite common for new startups to have a strong start and then drop in price once their project fails to take off. If the Saga ecosystem can’t attract new developers and continue to release impressive projects, investors could see some major SAGA losses in the future.

Since this coin is so volatile right now, investors need to 

. It has the potential for both big profits and big losses, so you’ll want to carefully consider how these price shifts might affect your portfolio. For best results, avoid investing more than you can afford to lose, make sure you diversify your investments — and 

By offering developers the chance to create their own dedicated chains, Saga offers a more convenient and scalable system for blockchain gaming. Its helpful features and low transaction fees have already attracted many people, and it's no surprise that many others are interested in the project. Furthermore, SAGA tokens have had a promising start with extremely impressive growth. If the Saga company can successfully capitalize on its early buzz, it has a bright future.

Intermediate

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Saga (SAGA): Catalyzing the Multiverse With Scalable Chains

Discover Masa, a platform empowering individuals to control and monetize their data, decentralizing AI storage and promoting ethical data sharing.

Few areas of the crypto industry are as popular these days as artificial intelligence (AI). AI-related tokens and projects experience some of the highest growth rates, with particular interest attached to generative AI technology and large language models (LLMs), all thanks to OpenAI's massively popular ChatGPT tool. This is no surprise, as blockchain technology has the potential to address many of the limitations of LLM algorithms, particularly those related to the issues of data and centralization of AI models.

The Masa network (MASA) is a new AI-focused crypto platform that brings a fresh paradigm to the world by allowing individuals to control and monetize their personal data. Its platform also contributes to the AI revolution by decentralizing the storage of both the user data and the LLMs utilizing it.

 (MASA) is a blockchain platform that provides access to user-consented, hyper-specific behavioral and personal data and decentralized LLM algorithms. 

The platform launched its operations on Apr 11, 2024. Masa operates as a subnet on the 

 (AVAX) blockchain. To enable cross-chain functionality, it has also integrated 

 technology. This lets Masa bridge assets, initially to two key blockchains, 

 (BSC), with additional chains to be added in the future.

Masa provides user-consented AI data that’s stored in a decentralized way. As of mid-April 2024, more than 40 million data points from over 1.4 million 

 user wallets are available via its permissionless data layer. Masa represents an entirely new decentralized AI paradigm: while most data providers use centralized storage solutions, its platform's data is always stored in a decentralized, blockchain-based format.

The data made available via Masa’s platform is user-consented for collection and privacy-protected using its Zero-Knowledge 

 (zkSBT) technology, which allows users to share their personal data securely and confidentially by storing this encrypted data on the blockchain. Thanks to the zkSBT, users can share fairly detailed personal data while protecting their identities and the specifics of their online activities.

This user-consented data is directly sourced from users through the Masa App and Masa Chrome browser extension with their consent. Users have complete control over their data, which is collected in a highly detailed, verified and ethical manner. 

As such, it's different from the typical user-aggregated data collected from the internet by companies. Compared to user-consented data, user-aggregated data tends to be less granular and, obviously, has ethical strings attached to it: in most cases, users don't consent to the collection of such data, or (at best) provide reluctant consent by clicking on annoying "Accept All Cookies" buttons.

While focusing mostly on user-consented data, the Masa platform also offers developers a way to access user-aggregated data for a richer data network. Using Masa's web data scraper, developers can extract data from websites, social media posts, blogs and online databases.

User-aggregated data is collected by data node workers via the Masa Oracle network and Masa Chrome extension and stored on the platform, benefiting from the 

In addition to datasets, Masa enables the decentralized execution of LLM algorithms, facilitated by the Oracle node workers, who leverage their surplus CPU and GPU computing power to run open-source LLMs for fine-tuning AI models.

The Masa project aspires to achieve goals crucial to the development of all data and AI industries. First, Masa allows individuals to completely control their own personal data by choosing what to share with the outside world while protecting their confidentiality. The blockchain-based storage mode also ensures the security of the stored data. Additionally, users can monetize access to their personal data, becoming a major beneficiary of its use.

All of these benefits are in stark contrast to the traditional way user data is collected, stored and used on Web 2.0 platforms. In this traditional mode, one is often unaware of what personal data is collected about them, as well as when and by whom. Although the data used for analytics purposes might be in an aggregated form, together with the details of other online users, individual users are still part of the "guinea pig" cohort whose details have been unceremoniously extracted and utilized without their knowledge or consent.

Moreover, when hit online with some fairly relevant advertising based on past search phrases, one begins to realize that data isn't always used in an aggregated format. In fact, its utilization can be quite personalized. And of course, in the traditional mode of data collection, we’re all rarely reimbursed for the data we share.

Another aim of the Masa project is to provide a secure and efficient decentralized infrastructure for running LLM algorithms. Traditional, centralized hosting solutions for AI models face challenges, such as technical capacity and security issues. For instance, many centrally hosted LLM-based solutions suffer from performance degradation when large numbers of users access them simultaneously. Masa's approach to leveraging decentralized resources for running open-source LLMs efficiently addresses these capacity limitations, providing enhanced scalability and reliability for AI applications.

Masa operates as a subnet on the Avalanche blockchain, using cross-chain communications supported by LayerZero to access other networks as well. Avalanche subnets are completely independent 

 networks with their own set of rules and functionalities. Subnets, including Masa, use Avalanche's validators, or a subset of validators, to secure the network and achieve consensus.

Besides the validators, the Masa network has another type of functional nodes — 

. These special Masa nodes play a critical role in providing structured data and advanced AI models while prioritizing data privacy.

The Masa Oracle network acts as a decentralized web scraper, gathering data from the internet and organizing it for AI training and development. This approach gives developers access to hyper-personalized training data to improve language model performance. It also supports the decentralization of LLMs, making them easily accessible without complex setup.

As mentioned above, users can manage access to and monetization of their personal data via Zero-Knowledge Soulbound Tokens (zkSBTs), which provide a secure way of providing access to users’ personal data without compromising their privacy.

 is the main gateway for users to interact with the Masa platform. It lets them provide access to personal data and earn crypto rewards by staking data in four different ways:

Masa’s native cryptocurrency, MASA, is a utility and 

 used to reward users for providing their data to the network. 

 MASA also earns you crypto rewards. Entities who wish to utilize data held by the network pay for access to it in MASA tokens. The token is also used to reward the Oracle nodes.

As a governance token, MASA lets you participate in votes on any changes and upgrades to the platform's rules or fee structure.

The token's supply economics doesn't specify a maximum cap. MASA's total supply is 1,588,866,523, which will be released gradually over a period of around four years starting in April 2024. Token supply allocation shares are per the table below.

The MASA token is available on Bybit via a 

. Bybit's Spot and Derivatives markets provide you with opportunities to trade hundreds of cryptocurrencies and crypto-based products. If you don’t have a Bybit account, you can easily 

 to access Bybit's range of crypto products and assets.

The Masa network is a refreshing addition to the data industry, whose user consent and privacy have been under attack for many years. The Masa platform puts data ownership in users' hands, allowing them to control access to their data and benefit from its monetization. As online privacy concerns and invasive Web 2.0 advertising shenanigans grow, more users will be attracted to Masa's unique data concept.

In addition to allowing individuals to control and monetize their data, Masa also contributes significantly to the development of 

, which is important because the decentralized mode of data and model storage championed by the platform has the potential to solve many technical limitations of LLMs and other types of AI algorithms. This is a network full of merit and promise; all it needs now is wider recognition and user adoption.

Advanced

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Masa (MASA): Powering AI With User-Centric Data Monetization

Today’s outperformer is LSK, which jumped 17.63% after Lisk partners with Velodrome to enhance blockchain access and drive ecosystem growth.

The SPX index is down 0.22% as the market anticipates less Federal Reserve rate cuts, considering the possibility of no cuts this year. The broader cryptocurrency market is up, with Bitcoin and Ether rising by 4.18% and 3.19%, respectively in the past 24 hours.

Lisk (LSK), launched on May 2016, is a cryptocurrency platform that enables developers to build decentralized applications (dapps) using JavaScript and TypeScript. It supports custom "sidechains" within its network, offering tools like a software development kit. Lisk has announced a partnership with Velodrome to support and expand its blockchain ecosystem. Lisk will purchase and lock $VELO tokens for voting, directing VELO emissions to key pairs on Lisk. This collaboration aims to support existing protocols on Lisk, attract new developers, and enhance blockchain accessibility and adoption in emerging markets. Velodrome will back Lisk's Layer 2 initiatives, aligning with the goal of creating a scalable, interoperable Ethereum future.

Check Out the Latest Prices, Charts, and Data of 

The Runes protocol is set to debut alongside Bitcoin's 2024 halving, heralding a new phase in Bitcoin's evolution by enabling the creation of fungible tokens directly on its network. This follows the impactful Ordinals protocol, which significantly expanded Bitcoin's functionalities. The Runes protocol will spark competition among developers to issue and acquire the first tokens, with global exchanges ready to support these tokens from day one. The halving event will also feature a race to mine a highly valuable "Epic" satoshi. As Bitcoin approaches this transformative era, extensive preparations and educational initiatives are underway to equip users for the forthcoming changes, marking a profound shift in Bitcoin's operational and cultural landscape.

Spot Bitcoin ETFs have yet another day of outflow, however, yesterday’s outflow was close to neutral. The market has seen fluctuating flows in these ETFs, with significant activity in some and none in others, reflecting mixed investor reactions. Recent substantial outflows echo trends from March, but analysts regard such fluctuations as typical for ETFs and not indicative of failure. Despite this volatility, the outlook for Bitcoin ETFs remains positive as they continue to draw institutional interest and shape market dynamics.

Avail, a blockchain data-availability protocol developed using Polygon’s SDK, has announced an airdrop of 600 million AVAIL tokens, marking its one-year anniversary since spinning off from Polygon Labs. The "Unification Drop" aims to bring together various blockchain communities by rewarding developers, governance contributors, educators, rollup users, stakers, and others who have significantly contributed to the ecosystem. Avail's infrastructure includes three segments: Nexus for cross-chain transactions, Fusion for liquid staking on chains like Ethereum and Bitcoin, and DA for scaling rollups through technologies like KZG commitments. The airdrop will distribute tokens to 354,605 wallet addresses and includes significant allocations for various roles across multiple blockchains, including Ethereum, Bitcoin, Solana, Cosmos, and more, emphasizing a unified Web3 environment.

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Runes Protocol Revolutionizes Bitcoin with New Token Capabilities Ahead of 2024 Halving

Nolus is a decentralized finance lending protocol with cross-chain capabilities. Learn more about how it works in this article.

One of the big advantages of decentralized finance (

) is that it provides more options for users. People who cannot get traditional loans because a typical bank deems them "high-risk" can turn to the DeFi sector to borrow crypto assets. The Nolus Protocol is a new DeFi lender that offers users all sorts of exciting opportunities. To see how this intriguing project works, explore this guide to learn all about Nolus.

 is a DeFi lending protocol. It has cross-chain capabilities that let people choose the most favorable rates possible and avoid the need to save up funds for liquidity.

Nolus was founded by Ivan Kostov and Kamen Trendafilov. Kostov worked in traditional finance, while Trendafilov has a background in marketing and business. During their time in these sectors, Nolus's founders realized that blockchain networks had the potential to revolutionize banking. They decided to join together and create a new leasing system that makes the most of DeFi products instead of just trying to mimic past banking methods.

Nolus started work on its plans in 2022 and officially launched its mainnet in 2023, having successfully completed several investing rounds and receiving 

 Token Metrics, Autonomy Capital, Everstake and more.

Nolus aims to tackle three problems common in crypto lending markets:

 software developer kit (SDK). Its code is entirely open sourced, and is updated and changed only when all stakeholders in the Nolus community vote to do so. According to the Nolus white paper, its ecosystem’s goal is “to build a novel user experience–driven automated money market” that facilitates direct interactions between lenders and borrowers without involving any other users.

The Nolus lending method starts with lenders choosing to supply 

 to the system. Any borrower who submits a down payment can get a loan from this supply of stablecoins. Both the coins and the down payment are 

, and interest is determined based on the value of the items. There’s no fixed repayment schedule, but the smart contracts ensure that interest is automatically removed from the collateral, and then paid to the lender at regular intervals. Once the user decides to repay the lease, the original assets are released from the smart contract.

Nolus's lending protocol includes many ways for customers to profit and enjoy convenient services. Here are the main DeFi products you can access through Nolus.

DeFi leasing on Nolus is designed to be as convenient as possible. Customers don’t have to go through a lengthy application or pay a lot of fees to other users. You just enter your collateral and get a loan of up to three times the value of the initial investment. Interest rates vary between 11% and 18%, based on the market value of the digital assets. The 

 allow the loan to be repaid on your own schedule. However, keep in mind that you pay more interest if you wait a longer amount of time to repay the loan.

If you want to earn money based on your existing crypto, you can join one of the many 

 on Nolus by submitting stablecoins in exchange for interest-bearing Nolus crypto. When you're ready to withdraw your funds and stop participating in DeFi leasing, you can cash out your Nolus tokens to receive your initial asset, plus any additional interest or network fees you’ve earned.

Nolus's system of money markets isn't the only thing they provide. Users who decide to 

 a crypto asset on Nolus can earn more money. The Nolus ecosystem offers the option of staking NLS tokens in exchange for various incentives. Lenders receive higher amounts of rewards for lending stablecoins, and borrowers get a lower interest rate.

Nolus has had some impressive growth since its launch in 2023. In just six months, the lending protocol has assisted with thousands of loans, collectively worth $8.6 million in total. Its team calculates that they've managed to achieve an average 

Nolus hopes to expand on this momentum in 2024. Its main plan is to continue marketing the lending protocol heavily, attracting more users who want to do their own research and find the best possible loans. To further attract users from the DeFi sector, Nolus aims to add more support for other crypto tokens and increase network liquidity. Nolus stands for community-led governance, so they don't have a long-term road map in place. Instead, they plan to evolve and adjust to suit whatever community needs arise in the future.

. It allows users to adjust their interest rates, and it's also a 

. People with NLS tokens can vote on how the platform is run and help implement new changes for the platform. The NLS token has a total supply of 1 billion. Nolus’s plan is to gradually mint tokens over a ten-year period, and implement a token buyback program to help maintain value. NLS token distribution will be as follows:

When the NLS token was released in the summer of 2023, Nolus prices were fairly stable. However, now that investors can sell their NLS tokens, prices have become more volatile. Starting in December 2023, NLS prices 

, and although the token currently seems to be dropping from its all-time high of $0.10, more price increases seem likely in the future.

Not only is the market for the NLS token quite bullish right now, but the Nolus lending protocol is also attracting a lot of positive attention in the crypto space. If the network can maintain its positive attention and attract more users, prices seem likely to rise even further. CoinCodex predicts Nolus prices will stay in the $0.04 to $0.19 range for 2025, and hit 

. This attitude is backed up by crypto influencers such as Crypto Revolution, 

 an underrated crypto with a lot of potential for growth.

The Nolus project is a well-thought-out crypto protocol that offers users significant advantages. Its innovative approach to lending could potentially attract a lot of users from the DeFi space. In addition to having a reliable system backed with effective technology and a detailed white paper, NLS digital assets have also experienced some promising growth patterns. The crypto asset has had a slow yet steady climb in price, and now that it's trending in crypto news, it seems poised to take off.

However, keep in mind that it's still important to 

 on digital assets. Some crypto investors might find it concerning that the Nolus project is mostly backed by marketers, instead of blockchain enthusiasts. There have also been some tech issues, such as the 

 that led to some unnecessary margin calls. Subsequent issues could limit price appreciation of its crypto assets. Therefore, it's necessary to approach Nolus with caution and not overextend your finances.

Nolus's DeFi lease system allows people to obtain easy access to crypto. Its innovative approach provides investors with significant advantages. Unlike traditional finance, there's no lengthy application process, and in contrast to many other blockchain networks Nolus doesn't have frequent margin calls or high network fees. As long as Nolus doesn't run into any technological issues or financial problems, its network is likely to have a lot of success in the DeFi space.

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Nolus (NLS): Crafting Liquidity's Future With Leading DeFi Leases

Bybit Learn

Blockchain

A Merkle tree is a structure that is used to verify data integrity in a set. Find out how it works and its role in blockchain in this article.

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Merkle trees are used in computer science applications as a data structure for data verification and synchronization. Merkle trees are also used to more securely and efficiently encrypt 

With cryptocurrencies, a Merkle tree database is used to securely split the block's data and ensure that it is not lost, damaged, or altered. This method of data management makes it possible to validate specific transactions without downloading the entire, terabyte-sized blockchain. It is a reliable, secure, and cryptographic method of running the blockchain.

 giant, FTX, many CEXs have built and implemented Merkle Tree as a form of 

 to assure users that their funds are safe. In this article, we will be discussing what are Merkle trees, their role in blockchain and how a user can validate their funds using the Merkle tree.

Ralph Merkle, a computer scientist renowned for his work on 

, proposed Merkle trees in the 1987 paper "A Digital Signature Based on a Conventional Encryption Function". Cryptographic hashing was also invented by Merkle.

Merkle tree is a hash-based mathematical data structure that compiles the summaries of all the transactions in a block. It is a method for quickly checking the accuracy of data in a decentralization manner. As a result of its functionalities, Merkle trees are utilized more effectively and securely to encrypt blockchain data. 

Merkle trees are often used with peer-to-peer (P2P) networks because of the need to have information shared and independently validated. Let’s understand more about Merkle trees and how they work.

The Merkle tree, also known as a hash tree, has a binary tree structure, with the hashes of the transactional data on the bottom row being referred to as "Leaf Nodes," the intermediate hashes being referred to as "Non-Leaf Nodes," and the hash at the top being referred to as the "Root." Even though the majority of hash tree implementations are binary (each node has two child nodes), they can also have a lot more child nodes.

When looking at the structure of a Merkle tree, all transactions are grouped in pairs. Each pair has a computed hash that's stored directly in the parent node. These nodes are also grouped into pairs, after which their hash is stored on the next level up. This process continues until reaching the root of the Merkle tree.

Let’s take a look at each of the nodes:

These are the hashes of each cryptocurrency transaction in a block, also referred to as transaction IDs (TXIDs). You view the transaction hash when you search for a transaction on a block explorer.

Then, to create a layer of non-leaf nodes above the leaf nodes, these leaf nodes are hashed together in pairs. They are known as non-leaf nodes because, in contrast to leaf nodes, they merely store the hash of the two leaf nodes that it represents and don't contain transaction IDs (or hashes). As a result, there will be half as many hashes (or nodes) in the non-leaf node layer above the leaf nodes as there are in the leaf node layer. As the tree narrows as it ascends, these non-leaf node layers continue to be hashed together in pairs, resulting in half as many nodes per layer. Two nodes will be present in the final non-leaf node layer. This creates the Merkle root and is the location of the last hashing in a Merkle tree.

With Bitcoin, the hashes of all transactions are combined into a single hash and stored in the block header. The Merkle root, also known as the root hash, is this particular hash. The leaf nodes (transaction IDs/hashes) at the base of the Merkle tree can be verified using this Merkle root. When used for cryptocurrencies, the Merkle root makes sure that data blocks are unaltered, undamaged and whole.

A Merkle tree is binary, which means that the total number of different leaf nodes must be even for the tree to be properly constructed. When an odd number of leaf nodes exists, the previous hash will be duplicated to provide an even number of nodes.

A Merkle tree is essentially designed to break large pieces of data into considerably smaller chunks, which ensures that all the transactions can be verified promptly. The tree summarizes every transaction by creating a small fingerprint of a specific set of transactions, which makes it easier for users to verify the availability of transactions in a block. 

Merkle trees are formed by hashing different pairs of nodes until just one hash remains, which is referred to as the 

. These trees are built from the bottom up, with each transaction consisting of hashes. Every leaf node is a singular hash of data. As for non-leaf nodes, these are hashes of previous hashes.

Let's say that a Merkle tree consists of four transactions which are labeled D0, D1, D2 and D3. Each transaction is hashed before the hash is stored directly on the leaf node. When this occurs, hash N0, N1, N2 and N3 are created. Any consecutive pair of leaf nodes will then be summarized in a parent node via the hashing of hash N0 and hash N1, which results in hash N4. If hash N2 and hash N3 are hashed together, hash N5 is created. Both of these hashes, N4 and N5, are hashed once more in order to create the Merkle root.

This process can be used with extensive data sets. The Merkle root is responsible for summarizing the data that's present in specific transactions, all of which are stored directly in the block header. This technique results in data integrity being properly maintained. In the event that one detail within the transaction is changed at some point, the Merkle root will automatically change alongside it.

There are many benefits for blockchain technology and cryptocurrency platforms when using a Merkle tree to verify transactions, which include everything from efficient verification to easy tampering detection.

It's easy for transaction integrity to be verified in practically no time at all. Because of how the data is structured, very little memory needs to be used during the verification process and the computing power required is significantly reduced. 

Because blockchains typically consist of hundreds of thousands of blocks, each of which can contain up to several thousand transactions, validating the data poses two major challenges: memory space and computing power. Every node on the network would have been required to maintain a complete copy of every transaction that has ever taken place on the blockchain if Merkle trees were not a concept in the blockchain. A node would have had to compare each entry line by line when verifying a transaction to ensure that its records exactly match the network records. The network's security could be jeopardized if there was any discrepancy between the records. As a result, to compare the records to make sure there had been no changes, the computer used to validate the data would have needed much more processing power. 

Merkle trees, on the other hand, offer a solution to this issue by drastically reducing the amount of data that must be kept on hand for verification needs. They hash every entry in the ledger, effectively separating the data itself from the evidence supporting it. Without knowing every single TXID in a block, you can check a TXID using the Merkle root with a Merkle tree. A Merkle tree is essentially a great way to demonstrate that something is present in a dataset without having to download the entire set. Consequently, less computing power is needed to validate the transactions.

As a result of the distribution of the transactions on the block among the validators, each validator is working on a different transaction at the same time. Compared to a method where each transaction is sequentially validated after another, this is much more effective.

Simple Payment Verification (SPV), which enables you to confirm a transaction without downloading an entire block or blockchain, is made possible by the Merkle tree. This enables the use of a light-client node, more formally known as a crypto wallet, to send and receive transactions.

The hash structure makes it easy for miners to identify if tampering has occurred with transactions. 

A distinct hash value is generated for each block using the Merkle root. The block links one block to another in the blockchain by including the hash of the preceding block. The hash of any transaction changes whenever that transaction is modified. The block becomes invalid as a result of this change because it cascades up to the Merkle Root and alters its value. This then causes a change in the hash of the following block, rendering the remainder of the Blockchain invalid. As a result, the Merkle tree creates an immutable record of the block's transactions.

Double spending can also be prevented as a result. If an individual tries to double-spend his digital currency, a hash will be generated for that transaction. If that hash matches the existing records present on the Blockchain, that transaction is rejected.

Why Are Merkle Trees Important in Blockchains?

Merkle trees have proven to be essential for blockchain technology because they facilitate quick and easy verification in a manner that's not possible with other techniques. These Merkle trees provide developers with the ability to compress exceedingly large sets of data by getting rid of all unnecessary data, and turning the data that remains into hashes. The various features provided by Merkle trees include:

As mentioned in the beginning, following the downfall of FTX, users have been concerned as to whether their funds are actually kept safe in CEXs. As a result, multiple CEXs have come forth to develop a Merkle Tree Proof-of-Reserve mechanism. In this section, we will be looking into Merkle proofs and how our users can validate their funds.

A Merkle tree proof is a cut from a Merkle tree, not the actual tree. And be represented as an array or sequence (shown by the orange portion in the diagram below).

All of the leaf nodes and the balance information for a particular single user of our company are represented by the figure's last level nodes. Assuming that the pink people in the figure represent the intended recipients of the proofs, we extract the orange portions of the figure level by level and present the proof documents to the users in order of height. It's significant to remember that the Merkle proof has two main components

Taking the volume of 10 million users as an example, the height of the tree can be calculated as Log2(10,000,000) = 23.2534966642 based on the mathematical formula, which gives the height of the tree as 24 levels. Therefore, the nodes in the graph that are intentionally not provided to users will be 24 - 2 = 22.

Merkle tree is a complete binary tree, which allows us to calculate all of the information about its parent node by simply knowing the left and right nodes. Two parts make up this complete information: the balance data and the hash data.

The validation of the Merkle tree is computed by deriving the B and D and verifying that

By utilizing a hash summary function, the Merkle tree enables users to determine whether they are a part of the entire tree without having to be aware of every purple node in the graph. The Merkle proof is exclusive to that user. For instance, a 24-level Merkle tree requires an array of 23 elements to verify the user's balance information, and this array can only confirm that the user's balance proof is accurate.

The user cannot reconstruct the entire tree based on his or her fragmented information as long as they do not obtain more than half of the total number of users. As a result, the Merkle tree protects both user privacy and the company's ability to prevent the leak of information about the company's overall assets.

There are 2 methods available for you to validate your Bybit account and to check the validity of funds.

This method is the first and only one in the entire network, and it will show the node derivation process of Merkle Tree validation in an intuitive graphical manner on the company's platform.

The company's Merkle tree generation source code and validation code are openly available on github to assist users in programming their own validation. The Merkle tree calculation process involves a huge amount of user calculations, which are usually implemented by big data and Java. 

*An open Java code means that it is open to users without holding back any information.

 for professional users to validate their own Merkle Tree proof file by copying it from their proof of reserves page to their own "sticky" version of the system via the 

 button and storing it as a file named myProof.json to local disk.

Applications of Merkle Trees in Blockchain

Merkle tree and Merkle root structures have already been widely adopted across many different blockchains and cryptocurrency platforms. The following details three such applications.

 uses Merkle trees in several ways, which makes these trees integral to the entire Bitcoin platform. In fact, these trees are present in every Bitcoin block header. The hash for every transaction that's available within the block is placed in the header. When it comes to Bitcoin, the Merkle root is important for mining as well as verification.

Bitcoin blocks consist of headers that contain metadata as well as an extensive list of transactions. This list is usually larger than the block's header. Miners hash data to create an output that adheres to specific conditions, which is necessary when validating a block. The miners can make trillions of separate attempts before they find a valid block. Every attempt requires a number in the header of the block to be changed. Even though thousands of separate transactions can exist in a block, each one must be hashed.

Merkle roots allow miners to make this process much more efficient. When the mining process begins, all that's necessary is for the transactions to be made into a Merkle tree, after which the root hash can be placed within the block header. At this point, the miner is only required to hash the header of the block, as opposed to the entire block.

Another aspect of the Merkle root that's used with Bitcoin involves leverage, which focuses on light clients. When a node is being operated on a relatively weak device that has limited resources, users won't be able to download and hash every transaction in a single block. Instead, a Merkle proof can be requested, which is confirmation that a transaction is present in a block. By reducing the number of hashes that need to be performed during the verification process, verification can occur without using as many computing resources.

 is based on a somewhat modified version of the Merkle tree, which is why it's referred to as the 

. Every block within the Ethereum blockchain consists of three Merkle trees, as opposed to one binary tree — which is what happens in Bitcoin blocks. Each of the three roots has its own purpose.

The initial root is considered to be the root of every transaction. As for the second root, it shows the state of the transaction. The final root is the receipt of the transaction. A user can look at a Merkle root to determine if a transaction is found on a specific block, as well as determine what their account balance is.

, this blockchain platform uses a Merkle tree to compute block data as a hash. The hash value identifies the width of the Merkle tree. Merkle trees on the Hyperledger Fabric platform work just like the ones on the Bitcoin platform.

Merkle trees have proven to be highly useful for cryptocurrency platforms that want to make sure their transaction verification process is as easy and efficient as possible. Without this structure in place, verification would be a time-consuming process because the data would need to be transferred throughout the entire network for verification. The platforms that use Merkle trees benefit from less bandwidth and computational power requirements.

What Is a Merkle Tree & What Is Its Role in Blockchain?

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