Where are Merkle trees used in Bitcoin and why are they important? I've been trying to understand how Merkle trees are used in bitcoin and why they are important. There's a very nice explanation in the answer provided here: Why is the full Merkle path needed to verify a transaction , but what's missing from that explanation is some context about which entities have which information they can trust. So I created a scenario to attempt to understand it, provided below. My question is: Do I have this right, and if not, what am I missing? Scenario: Let's say Alice wants to hire Bob to murder Chuck. No, just kidding, Alice wants to hire Bob to perform some perfectly legal service, which Bob is willing to do for a certain price, in Bitcoin. First, Alice tells her wallet to create a transaction in which she gives that amount to Bob, let's call that transaction TxAB, and (skipping a bunch of steps) that transaction eventually gets included in a block on the chain, and th...
