corda/docs/source/merkle-trees.rst

Transaction tear-offs

One of the basic data structures in our platform is a transaction. It can be passed around to be signed and verified, also by third parties. The construction of transactions assumes that they form a whole entity with input and output states, commands and attachments inside. However all sensitive data shouldn’t be revealed to other nodes that take part in the creation of transaction on validation level (a good example of this situation is the Oracle which validates only embedded commands). How to achieve it in a way that convinces the other party the data they got for signing really did form a part of the transaction?

We decided to use well known and described cryptographic scheme to provide proofs of inclusion and data integrity. Merkle trees are widely used in peer-to-peer networks, blockchain systems and git. You can read more on the concept here.

Merkle trees in Corda

Transactions are split into leaves, each of them contains either input, output, command or attachment. Additionally, in transaction id calculation we use other fields of WireTransaction like timestamp, notary, type and signers. Next, the Merkle tree is built in the normal way by hashing the concatenation of nodes’ hashes below the current one together. It’s visible on the example image below, where H denotes sha256 function, "+" - concatenation.

The transaction has two input states, one of output, attachment and command each and timestamp. For brevity we didn't include all leaves on the diagram (type, notary and signers are presented as one leaf labelled Rest - in reality they are separate leaves). Notice that if a tree is not a full binary tree, leaves are padded to the nearest power of 2 with zero hash (since finding a pre-image of sha256(x) == 0 is hard computational task) - marked light green above. Finally, the hash of the root is the identifier of the transaction, it's also used for signing and verification of data integrity. Every change in transaction on a leaf level will change its identifier.

Hiding data

Hiding data and providing the proof that it formed a part of a transaction is done by constructing Partial Merkle Trees (or Merkle branches). A Merkle branch is a set of hashes, that given the leaves’ data, is used to calculate the root’s hash. Then that hash is compared with the hash of a whole transaction and if they match it means that data we obtained belongs to that particular transaction.

In the example above, the node H(f) is the one holding command data for signing by Oracle service. Blue leaf H(g) is also included since it's holding timestamp information. Nodes labelled Provided form the Partial Merkle Tree, black ones are omitted. Having timestamp with the command that should be in a violet node place and branch we are able to calculate root of this tree and compare it with original transaction identifier - we have a proof that this command and timestamp belong to this transaction.

Example of usage

Let’s focus on a code example. We want to construct a transaction with commands containing interest rate fix data as in: oracles. After construction of a partial transaction, with included Fix commands in it, we want to send it to the Oracle for checking and signing. To do so we need to specify which parts of the transaction are going to be revealed. That can be done by constructing filtering function over fields of WireTransaction of type (Any) -> Boolean.

val partialTx = ...
val oracle: Party = ...
fun filtering(elem: Any): Boolean {
        return when (elem) {
            is Command -> oracleParty.owningKey in elem.signers && elem.value is Fix
            else -> false
        }
}

Assuming that we already assembled partialTx with some commands and know the identity of Oracle service, we construct filtering function over commands - filtering. It performs type checking and filters only Fix commands as in IRSDemo example. Then we can construct FilteredTransaction:

val wtx: WireTransaction = partialTx.toWireTransaction()
val ftx: FilteredTransaction = wtx.buildFilteredTransaction(filtering)

In the Oracle example this step takes place in RatesFixFlow by overriding filtering function, see: filtering_ref

FilteredTransaction holds filteredLeaves (data that we wanted to reveal) and Merkle branch for them.

// Direct accsess to included commands, inputs, outputs, attachments etc.
val cmds: List<Command> = ftx.filteredLeaves.commands
val ins: List<StateRef> = ftx.filteredLeaves.inputs
val timestamp: Timestamp? = ftx.filteredLeaves.timestamp
...

../../samples/irs-demo/src/main/kotlin/net/corda/irs/api/NodeInterestRates.kt

Above code snippet is taken from NodeInterestRates.kt file and implements a signing part of an Oracle. You can check only leaves using leaves.checkWithFun { check(it) } and then verify obtained FilteredTransaction to see if data from PartialMerkleTree belongs to WireTransaction with provided id. All you need is the root hash of the full transaction:

if (!ftx.verify(merkleRoot)){
        throw MerkleTreeException("Rate Fix Oracle: Couldn't verify partial Merkle tree.")
}

Or combine the two steps together:

ftx.verifyWithFunction(merkleRoot, ::check)

Note

The way the FilteredTransaction is constructed ensures that after signing of the root hash it's impossible to add or remove leaves. However, it can happen that having transaction with multiple commands one party reveals only subset of them to the Oracle. As signing is done now over the Merkle root hash, the service signs all commands of given type, even though it didn't see all of them. This issue will be handled after implementing partial signatures.