Entanglement renormalization.

We propose a real-space renormalization group (RG) transformation for quantum systems on a D-dimensional lattice. The transformation partially disentangles a block of sites before coarse-graining it into an effective site. Numerical simulations with the ground state of a 1D lattice at criticality show that the resulting coarse-grained sites require a Hilbert space dimension that does not grow with successive RG transformations. As a result we can address, in a quasi-exact way, tens of thousands of quantum spins with a computational effort that scales logarithmically in the system's size. The calculations unveil that ground state entanglement in extended quantum systems is organized in layers corresponding to different length scales. At a quantum critical point, each relevant length scale makes an equivalent contribution to the entanglement of a block.