How a merkle tree is generated

Question

I have heard that SPV nodes doesn't need the copy of entire blockchain for verification. It is said that Merkle trees are used by such nodes. I have a doubt that how Merkle tree path is generated and how does it help in validating transaction??

Answer 1

In a Merkle tree, transaction IDs (txid) are checked to place the incoming transaction at the right location at the bottom of the Merkle tree, and the Merkle path is returned to the SPV for checking the content.

It's easier for the servers to return the Merkle path than to check very transaction to reduce the work-load. Hence, the whole process works out.

The transactions at the bottom are sorted by txid, and the hashed values are calculated for the entire transaction block.

Answer 2

Merkle trees are generated like this: The hash of leaf node pair is created and the parent hash is generated. Then these parent pair are hashed to generate their parent hash and this continues until there's only on parent left(the root node).