# Transaction Merkle Trees

When constructing a **Merkle Tree** of Bitcoin transactions, the **leaf nodes** are made up of **Transaction IDs (TXIDs)**.

Each TXID represents the **cryptographic fingerprint of a transaction.**

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### How Transaction IDs Are Created

Transactions are generally arranged in the order they are received across the network. However, due to **network latency**, this order isn’t always fixed or consistent across all nodes.

Each **TXID** is produced by passing the **serialized string of the raw transaction data** through the **SHA-256** algorithm **twice**, a process known as **double hashing (HASH256)**.

This ensures that the resulting **32-byte TXID** securely represents all the transaction’s contents — including:

* The **source of funds (wallet address)**
* The **amount transferred**
* The **locking conditions**
* Any **embedded metadata or scripts**

Every part of a Merkle Tree — from its **leaves** to its **interior nodes** and **root** — is formed using this **double SHA-256 process**, creating a chain of trust that ties every transaction securely to its block.


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