A bit vector is a data structure used to represent the status of various items using a series of bits. Each bit corresponds to a specific item or condition, where a value of ‘1’ indicates the presence or activation of that item, and ‘0’ indicates absence or deactivation.

In blockchain technology, bit vectors can efficiently track states, such as which transactions have been verified or which addresses hold certain tokens. This helps in optimizing storage and processing, as it reduces the amount of data that needs to be managed.

For instance, when validating transactions, a bit vector allows nodes to quickly determine the status of these transactions without needing to refer to larger data sets. This can improve performance by minimizing bandwidth usage and speeding up verification processes. Overall, bit vectors play a crucial role in enhancing efficiency and scalability in systems that require tracking multiple states with minimal overhead.