Programming Bitcoin

Chapter 11. Simplified Payment Verification

The one block header field that we didn’t investigate much in Chapter 9 was the Merkle root. To understand what makes the Merkle root useful, we first have to learn about Merkle trees and what properties they have. In this chapter, we’re going to learn exactly what a Merkle root is. This will be motivated by something called a proof of inclusion.

Motivation

For a device that doesn’t have much disk space, bandwidth, or computing power, it’s expensive to store, receive, and validate the entire blockchain. As of this writing, the entire Bitcoin blockchain is around 200 GB, which is more than many phones can store; it can be very difficult to download efficiently and will certainly tax the CPU. If the entire blockchain cannot be put on the phone, what else can we do? Is it possible to create a Bitcoin wallet on a phone without having all the data?

For any wallet, there are two scenarios that we’re concerned with:

1. Paying someone

2. Getting paid by someone

If you are paying someone with your Bitcoin wallet, it is up to the person receiving your bitcoins to verify that they’ve been paid. Once they’ve verified that the transaction has been included in a block sufficiently deep, the other side of the trade, or the good or service, will be given to you. Once you’ve sent the transaction to the other party, there really isn’t anything for you to do other than wait until you receive whatever it is you’re exchanging the bitcoins for.

When getting ...