Instant Auditing? Meet The Merkle-Patricia-Tree

Imagine if we could capture the current state of every financial transaction that was made from every single bank and in the whole of our financial infrastructure. And this would be for the whole history of our financial infrastructure. So, at any point in time, we would see the complete picture over time and would see exactly when all the transactions were made and who was involved. If we wanted, we could anonymise the transaction data too.

It would be a world where we could audit at any point in time, and get an instant record of the current state, and also get snapshots of every previous state. In this way, an auditor would be able to see everything and move back and forward through time. Well, what I’ve described is Ethereum, and it uses the Merkle-Patricia-Tree (trie) method to create a full world model of all the transactions.

Merkle Patricia Tree

With the Merkle tree, we create a tree of hashes, and where the root hash provides the overall consistency of the data within the tree. Its core advantage is that we can easily check that data is within the tree by analysing a subtree [here].

A Merkle-Patricia-Tree enhances this by using a key (normally defined as a string) to store associative arrays. Patricia is defined as a Practical Algorithm To Retrieve Information…