Two pair hashes compress four leaves into two parents.

highlighted = computed this step

Leaves are hashed in pairs

A and B form parent AB. C and D form parent CD.

AB,CDAB,\quad CD
Pair hashesA toy Merkle tree is recomputed from four one-byte chunks.Pair hashes - original root 0eroot 0eoriginal rootAB 65pair hashA aaleaf hashB bbleaf hashCD a9pair hashC ccleaf hashD ddleaf hash

A plus B wraps to 65

For AB, 0xaa plus 0xbb gives 0x165, so the low byte is 0x65.

H(aabb)=0x65H(aa\Vert bb)=0x65
Pair hashesA toy Merkle tree is recomputed from four one-byte chunks.Pair hashes - original root 0eroot 0eoriginal rootAB 65pair hashA aaleaf hashB bbleaf hashCD a9pair hashC ccleaf hashD ddleaf hash

C plus D wraps to a9

For CD, 0xcc plus 0xdd gives 0x1a9, so the low byte is 0xa9.

H(ccdd)=0xa9H(cc\Vert dd)=0xa9
Pair hashesA toy Merkle tree is recomputed from four one-byte chunks.Pair hashes - original root 0eroot 0eoriginal rootAB 65pair hashA aaleaf hashB bbleaf hashCD a9pair hashC ccleaf hashD ddleaf hash

Summary

The parent hashes are AB=0x65 and CD=0xa9.

AB=0x65,CD=0xa9AB=0x65,\quad CD=0xa9
Pair hashesA toy Merkle tree is recomputed from four one-byte chunks.Pair hashes - original root 0eroot 0eoriginal rootAB 65pair hashA aaleaf hashB bbleaf hashCD a9pair hashC ccleaf hashD ddleaf hash