corda/docs/source/tutorial-building-transactions.rst

Building Transactions
=====================

Introduction
------------

Understanding and implementing transactions in Corda is key to building 
and implementing real world smart contracts. It is only through 
construction of valid Corda transactions containing appropriate data 
that nodes on the ledger can map real world business objects into a 
shared digital view of the data in the Corda ledger. More importantly as 
the developer of new smart contracts it is the code which determines 
what data is well formed and what data should be rejected as mistakes, 
or to prevent malicious activity. This document details some of the 
considerations and APIs used to when constructing transactions as part 
of a flow. 

The Basic Lifecycle Of Transactions
-----------------------------------

Transactions in Corda are constructed in stages and contain a number of 
elements. In particular a transaction’s core data structure is the 
``net.corda.core.transactions.WireTransaction``, which is usually 
manipulated via a 
``net.corda.core.contracts.General.TransactionBuilder`` and contains: 

1. A set of Input state references that will be consumed by the final 
accepted transaction. 

2. A set of Output states to create/replace the consumed states and thus 
become the new latest versions of data on the ledger. 

3. A set of ``Attachment`` items which can contain legal documents, contract 
code, or private encrypted sections as an extension beyond the native 
contract states. 

4. A set of ``Command`` items which give a context to the type of ledger 
transition that is encoded in the transaction. Also each command has an 
associated set of signer keys, which will be required to sign the 
transaction. 

5. A signers list, which is populated by the ``TransactionBuilder`` to 
be the union of the signers on the individual Command objects. 

6. A notary identity to specify the Notary node which is tracking the 
state consumption. (If the input states are registered with different 
notary nodes the flow will have to insert additional ``NotaryChange`` 
transactions to migrate the states across to a consistent notary node, 
before being allowed to mutate any states.) 

7. Optionally a timestamp that can used in the Notary to time bound the 
period in which the proposed transaction stays valid. 

Typically, the ``WireTransaction`` should be regarded as a proposal and 
may need to be exchanged back and forth between parties before it can be 
fully populated. This is an immediate consequence of the Corda privacy 
model, which means that the input states are likely to be unknown to the 
other node. 

Once the proposed data is fully populated the flow code should freeze 
the ``WireTransaction`` and form a ``SignedTransaction``. This is key to 
the ledger agreement process, as once a flow has attached a node’s 
signature it has stated that all details of the transaction are 
acceptable to it. A flow should take care not to attach signatures to 
intermediate data, which might be maliciously used to construct a 
different ``SignedTransaction``. For instance in a foreign exchange 
scenario we shouldn't send a ``SignedTransaction`` with only our sell 
side populated as that could be used to take the money without the 
expected return of the other currency. Also, it is best practice for 
flows to receive back the ``DigitalSignature.WithKey`` of other parties 
rather than a full ``SignedTransaction`` objects, because otherwise we 
have to separately check that this is still the same 
``SignedTransaction`` and not a malicious substitute. 

The final stage of committing the transaction to the ledger is to 
notarise the ``SignedTransaction``, distribute this to all appropriate 
parties and record the data into the ledger. These actions are best 
delegated to the ``FinalityFlow``, rather than calling the inidividual 
steps manually. However, do note that the final broadcast to the other 
nodes is asynchronous, so care must be used in unit testing to 
correctly await the Vault updates. 

Gathering Inputs
----------------

One of the first steps to forming a transaction is gathering the set of 
input references. This process will clearly vary according to the nature 
of the business process being captured by the smart contract and the 
parameterised details of the request. However, it will generally involve 
searching the Vault via the ``VaultService`` interface on the 
``ServiceHub`` to locate the input states.

To give a few more specific details consider two simplified real world 
scenarios. First, a basic foreign exchange Cash transaction. This 
transaction needs to locate a set of funds to exchange. A flow 
modelling this is implemented in ``FxTransactionBuildTutorial.kt``. 
Second, a simple business model in which parties manually accept, or 
reject each other's trade proposals which is implemented in 
``WorkflowTransactionBuildTutorial.kt``. To run and explore these 
examples using the IntelliJ IDE one can run/step the respective unit 
tests in ``FxTransactionBuildTutorialTest.kt`` and 
``WorkflowTransactionBuildTutorialTest.kt``, which drive the flows as 
part of a simulated in-memory network of nodes. When creating the 
IntelliJ run configuration for these unit test set the workspace 
points to the root ``r3prototyping`` folder and add 
``-javaagent:lib/quasar.jar`` to the VM options, so that the ``Quasar`` 
instrumentation is correctly configured. 

For the Cash transaction let’s assume the cash resources are using the 
standard ``CashState`` in the ``:financial`` Gradle module. The Cash 
contract uses ``FungibleAsset`` states to model holdings of 
interchangeable assets and allow the split/merge and summing of 
states to meet a contractual obligation. We would normally use the 
``generateSpend`` method on the ``VaultService`` to gather the required 
amount of cash into a ``TransactionBuilder``, set the outputs and move 
command. However, to elucidate more clearly example flow code is shown 
here that will manually carry out the inputs queries using the lower 
level ``VaultService``. 

.. literalinclude:: example-code/src/main/kotlin/net/corda/docs/FxTransactionBuildTutorial.kt
    :language: kotlin
    :start-after: DOCSTART 1
    :end-before: DOCEND 1

As a foreign exchange transaction we expect an exchange of two 
currencies, so we will also require a set of input states from the other 
counterparty. However, the Corda privacy model means we do not know the 
other node’s states. Our flow must therefore negotiate with the other 
node for them to carry out a similar query and populate the inputs (See 
the ``ForeignExchangeFlow`` for more details of the exchange). Having 
identified a set of Input ``StateRef`` items we can then create the 
output as discussed below. 

For the trade approval flow we need to implement a simple workflow 
pattern. We start by recording the unconfirmed trade details in a state 
object implementing the ``LinearState`` interface. One field of this 
record is used to map the business workflow to an enumerated state. 
Initially the initiator creates a new state object which receives a new 
``UniqueIdentifier`` in its ``linearId`` property and a starting 
workflow state of ``NEW``. The ``Contract.verify`` method is written to 
allow the initiator to sign this initial transaction and send it to the 
other party. This pattern ensures that a permanent copy is recorded on 
both ledgers for audit purposes, but the state is prevented from being 
maliciously put in an approved state. The subsequent workflow steps then 
follow with transactions that consume the state as inputs on one side 
and output a new version with whatever state updates, or amendments 
match to the business process, the ``linearId`` being preserved across 
the changes. Attached ``Command`` objects help the verify method 
restrict changes to appropriate fields and signers at each step in the 
workflow. In this it is typical to have both parties sign the change 
transactions, but it can be valid to allow unilateral signing, if for instance 
one side could block a rejection. Commonly the manual initiator of these 
workflows will query the Vault for states of the right contract type and 
in the right workflow state over the RPC interface. The RPC will then 
initiate the relevant flow using ``StateRef``, or ``linearId`` values as 
parameters to the flow to identify the states being operated upon. Thus
code to gather the latest input state would be:

.. literalinclude:: example-code/src/main/kotlin/net/corda/docs/WorkflowTransactionBuildTutorial.kt
    :language: kotlin
    :start-after: DOCSTART 1
    :end-before: DOCEND 1

.. container:: codeset

   .. sourcecode:: kotlin

      // Pull in the latest Vault version of the StateRef as a full StateAndRef
      val latestRecord = serviceHub.latest<TradeApprovalContract.State>(ref)


Generating Commands
-------------------

For the commands that will be added to the transaction, these will need 
to correctly reflect the task at hand. These must match because inside 
the ``Contract.verify`` method the command will be used to select the 
validation code path. The ``Contract.verify`` method will then restrict 
the allowed contents of the transaction to reflect this context. Typical 
restrictions might include that the input cash amount must equal the 
output cash amount, or that a workflow step is only allowed to change 
the status field. Sometimes, the command may capture some data too e.g. 
the foreign exchange rate, or the identity of one party, or the StateRef 
of the specific input that originates the command in a bulk operation. 
This data will be used to further aid the ``Contract.verify``, because 
to ensure consistent, secure and reproducible behaviour in a distributed 
environment the ``Contract.verify``, transaction is the only allowed to 
use the content of the transaction to decide validity. 

Another essential requirement for commands is that the correct set of 
``CompositeKeys`` are added to the Command on the builder, which will be 
used to form the set of required signers on the final validated 
transaction. These must correctly align with the expectations of the 
``Contract.verify`` method, which should be written to defensively check 
this. In particular, it is expected that at minimum the owner of an 
asset would have to be signing to permission transfer of that asset. In 
addition, other signatories will often be required e.g. an Oracle 
identity for an Oracle command, or both parties when there is an 
exchange of assets. 

Generating Outputs
------------------

Having located a set of ``StateAndRefs`` as the transaction inputs, the 
flow has to generate the output states. Typically, this is a simple call 
to the Kotlin ``copy`` method to modify the few fields that will 
transitioned in the transaction. The contract code may provide a 
``generateXXX`` method to help with this process if the task is more 
complicated. With a workflow state a slightly modified copy state is 
usually sufficient, especially as it is expected that we wish to preserve 
the ``linearId`` between state revisions, so that Vault queries can find 
the latest revision.

For fungible contract states such as ``Cash`` it is common to distribute 
and split the total amount e.g. to produce a remaining balance output 
state for the original owner when breaking up a large amount input 
state. Remember that the result of a successful transaction is always to 
fully consume/spend the input states, so this is required to conserve 
the total cash. For example from the demo code: 

.. literalinclude:: example-code/src/main/kotlin/net/corda/docs/FxTransactionBuildTutorial.kt
    :language: kotlin
    :start-after: DOCSTART 2
    :end-before: DOCEND 2

Building the WireTransaction
----------------------------

Having gathered all the ingredients for the transaction we now need to 
use a ``TransactionBuilder`` to construct the full ``WireTransaction``. 
The initial ``TransactionBuilder`` should be created by calling the 
``TransactionType.General.Builder`` method. (The other 
``TransactionBuilder`` implementation is only used for the ``NotaryChange`` flow where 
``ContractStates`` need moving to a different Notary.) At this point the 
Notary to associate with the states should be recorded. Then we keep 
adding inputs, outputs, commands and attachments to fill the 
transaction. Examples of this process are: 

.. literalinclude:: example-code/src/main/kotlin/net/corda/docs/WorkflowTransactionBuildTutorial.kt
    :language: kotlin
    :start-after: DOCSTART 2
    :end-before: DOCEND 2

.. literalinclude:: example-code/src/main/kotlin/net/corda/docs/FxTransactionBuildTutorial.kt
    :language: kotlin
    :start-after: DOCSTART 3
    :end-before: DOCEND 3

Completing the SignedTransaction
--------------------------------

Having created an initial ``WireTransaction`` and converted this to an 
initial ``SignedTransaction`` the process of verifying and forming a 
full ``SignedTransaction`` begins and then completes with the 
notarisation. In practice this is a relatively stereotypical process, 
because assuming the ``WireTransaction`` is correctly constructed the 
verification should be immediate. However, it is also important to 
recheck the business details of any data received back from an external 
node, because a malicious party could always modify the contents before 
returning the transaction. Each remote flow should therefore check as 
much as possible of the initial ``SignedTransaction`` inside the ``unwrap`` of 
the receive before agreeing to sign. Any issues should immediately throw 
an exception to abort the flow. Similarly the originator, should always 
apply any new signatures to its original proposal to ensure the contents 
of the transaction has not been altered by the remote parties.

The typical code therefore checks the received ``SignedTransaction`` 
using the ``verifySignatures`` method, but excluding itself, the notary 
and any other parties yet to apply their signature. The contents of the 
``WireTransaction`` inside the ``SignedTransaction`` should be fully 
verified further by expanding with ``toLedgerTransaction`` and calling 
``verify``. Further context specific and business checks should then be 
made, because the ``Contract.verify`` is not allowed to access external 
context. For example the flow may need to check that the parties are the 
right ones, or that the ``Command`` present on the transaction is as 
expected for this specific flow. An example of this from the demo code is: 

.. literalinclude:: example-code/src/main/kotlin/net/corda/docs/WorkflowTransactionBuildTutorial.kt
    :language: kotlin
    :start-after: DOCSTART 3
    :end-before: DOCEND 3

After verification the remote flow will return its signature to the 
originator. The originator should apply that signature to the starting 
``SignedTransaction`` and recheck the signatures match.

Committing the Transaction
--------------------------

Once all the party signatures are applied to the SignedTransaction the 
final step is notarisation. This involves calling ``NotaryFlow.Client`` 
to confirm the transaction, consume the inputs and return its confirming 
signature. Then the flow should ensure that all nodes end with all 
signatures and that they call ``ServiceHub.recordTransactions``. The 
code for this is standardised in the ``FinalityFlow``, or more explictly 
an example is: 

.. literalinclude:: example-code/src/main/kotlin/net/corda/docs/WorkflowTransactionBuildTutorial.kt
    :language: kotlin
    :start-after: DOCSTART 4
    :end-before: DOCEND 4

Partially Visible Transactions
------------------------------

The discussion so far has assumed that the parties need full visibility 
of the transaction to sign. However, there may be situations where each 
party needs to store private data for audit purposes, or for evidence to 
a regulator, but does not wish to share that with the other trading 
partner. The tear-off/Merkle tree support in Corda allows flows to send 
portions of the full transaction to restrict visibility to remote 
parties. To do this one can use the 
``WireTransaction.buildFilteredTransaction`` extension method to produce 
a ``FilteredTransaction``. The elements of the ``SignedTransaction`` 
which we wish to be hide will be replaced with their secure hash. The 
overall transaction txid is still provable from the 
``FilteredTransaction`` preventing change of the private data, but we do 
not expose that data to the other node directly. A full example of this 
can be found in the ``NodeInterestRates`` Oracle code from the 
``irs-demo`` project which interacts with the ``RatesFixFlow`` flow. 
Also, refer to the :doc:`merkle-trees` documentation.