How are Merkle trees incorporated into blockchain blocks, and how do they establish a connection between the current block and the previous block in the chain?

Merkle Tree in block :

1. Transaction Hashes: Each transaction within a block is hashed using a cryptographic hash function (like SHA-256), creating a unique fingerprint for that transaction.
2. Building the Merkle Tree: These transaction hashes are then used to build a Merkle tree within the block. Transactions are paired and their hashes combined to create a new hash. This process continues until there’s a single hash at the top, called the Merkle Root.
3. Block Header Inclusion: The Merkle Root is included in the block header — the metadata section containing information about the block.

Previous Block Association:

1. Previous Block Hash: Within the block header of the current block, there’s also a field containing the hash of the previous block. This creates a chain-like structure.
2. Verification: When a new block is added to the blockchain, its Merkle Root and the previous block’s hash are verified.

• The Merkle Root ensures all transactions within the current block are valid and haven’t been tampered with.
• The previous block’s hash ensures the new block is a legitimate addition to the existing chain and hasn’t been inserted elsewhere.

Analogy :

• Each transaction in the current block has a unique fingerprint (hash).
• Merkle Tree summarizes the fingerprints of all sheets.
• The block header references the Merkle Root and the previous block using its fingerprint (hash).

This system ensures the integrity of data within each block (through Merkle Tree) and the chronological order of blocks in the entire blockchain (through previous block hash).

Connection Magic:

• When a new block is added, both its Merkle Root and the previous block’s hash are checked.
• The Merkle Root ensures all the transactions within the new block are valid (their fingerprints haven’t been tampered with).
• The previous block’s hash ensures the new block is added to the correct chain and hasn’t been inserted elsewhere.