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<title>Data model — R3 Prototyping 0.1 documentation</title>
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0.1
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<p class="caption"><span class="caption-text">Overview</span></p>
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<li class="toctree-l1"><a class="reference internal" href="inthebox.html">What’s included?</a></li>
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<li class="toctree-l1"><a class="reference internal" href="getting-set-up.html">Getting set up</a></li>
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<li class="toctree-l1 current"><a class="current reference internal" href="">Data model</a><ul>
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<li class="toctree-l2"><a class="reference internal" href="#description">Description</a></li>
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<li class="toctree-l2"><a class="reference internal" href="#comparison-with-bitcoin">Comparison with Bitcoin</a></li>
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<li class="toctree-l2"><a class="reference internal" href="#comparison-with-ethereum">Comparison with Ethereum</a></li>
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<li class="toctree-l1"><a class="reference internal" href="messaging.html">Networking and messaging</a></li>
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<li class="toctree-l1"><a class="reference internal" href="protocol-state-machines.html">Protocol state machines</a></li>
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<p class="caption"><span class="caption-text">Appendix</span></p>
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<li class="toctree-l1"><a class="reference internal" href="visualiser.html">Using the visualiser</a></li>
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<li class="toctree-l1"><a class="reference internal" href="roadmap.html">Roadmap</a></li>
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<div class="section" id="data-model">
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<h1>Data model<a class="headerlink" href="#data-model" title="Permalink to this headline">¶</a></h1>
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<div class="section" id="description">
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<h2>Description<a class="headerlink" href="#description" title="Permalink to this headline">¶</a></h2>
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<p>This article covers the data model: how <em>states</em>, <em>transactions</em> and <em>code contracts</em> interact with each other and
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how they are represented in the code. It doesn’t attempt to give detailed design rationales or information on future
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design elements: please refer to the R3 wiki for background information.</p>
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<p>We begin with the idea of a global ledger. In our model, although the ledger is shared, it is not always the case that
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transactions and ledger entries are globally visible. In cases where a set of transactions stays within a small subgroup of
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users it should be possible to keep the relevant data purely within that group.</p>
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<p>To ensure consistency in a global, shared system where not all data may be visible to all participants, we rely
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heavily on secure hashes like SHA-256 to identify things. The ledger is defined as a set of immutable <strong>states</strong>, which
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are created and destroyed by digitally signed <strong>transactions</strong>. Each transaction points to a set of states that it will
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consume/destroy, these are called <strong>inputs</strong>, and contains a set of new states that it will create, these are called
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<strong>outputs</strong>.</p>
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<p>States contain arbitrary data, but they always contain at minimum a hash of the bytecode of a
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<strong>code contract</strong>, which is a program expressed in some byte code that runs sandboxed inside a virtual machine. Code
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contracts (or just “contracts” in the rest of this document) are globally shared pieces of business logic. Contracts
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define a <strong>verify function</strong>, which is a pure function given the entire transaction as input.</p>
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<p>To be considered valid, the transaction must be <strong>accepted</strong> by the verify function of every contract pointed to by the
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input and output states. Beyond inputs and outputs, transactions may also contain <strong>commands</strong>, small data packets that
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the platform does not interpret itself, but which can parameterise execution of the contracts. They can be thought of as
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arguments to the verify function. Each command has a list of <strong>public keys</strong> associated with it. The platform ensures
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that the transaction is signed by every key listed in the commands before the contracts start to execute. Public keys
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may be random/identityless for privacy, or linked to a well known legal identity via a <em>public key infrastructure</em> (PKI).</p>
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<p>Note that there is nothing that explicitly binds together specific inputs, outputs or commands. Instead it’s up to the
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contract code to interpret the pieces inside the transaction and ensure they fit together correctly. This is done to
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maximise flexibility for the contract developer.</p>
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<p>Transactions may sometimes need to provide a contract with data from the outside world. Examples may include stock
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prices, facts about events or the statuses of legal entities (e.g. bankruptcy), and so on. The providers of such
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facts are called <strong>oracles</strong> and they provide facts to the ledger by signing transactions that contain commands they
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recognise. The commands contain the fact and the signature shows agreement to that fact. Time is also modelled as
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a fact, with the signature of a special kind of oracle called a <strong>timestamping authority</strong> (TSA). A TSA signs
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a transaction if a pre-defined timestamping command in it defines a after/before time window that includes “true
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time” (i.e. GPS time as calibrated to the US Naval Observatory).</p>
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<p>As the same terminology often crops up in different distributed ledger designs, let’s compare this to other
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distributed ledger systems you may be familiar with. You can find more detailed design rationales for why the platform
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differs from existing systems in <a class="reference external" href="https://r3-cev.atlassian.net/wiki/">the R3 wiki</a>, but to summarise, the driving
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factors are:</p>
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<ul class="simple">
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<li>Improved contract flexibility vs Bitcoin</li>
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<li>Improved scalability vs Ethereum, as well as ability to keep parts of the transaction graph private (yet still uniquely addressable)</li>
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<li>No reliance on proof of work</li>
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<li>Re-us of existing sandboxing virtual machines</li>
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<li>Use of type safe GCd implementation languages.</li>
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<li>Simplified auditing</li>
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</ul>
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</div>
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<div class="section" id="comparison-with-bitcoin">
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<h2>Comparison with Bitcoin<a class="headerlink" href="#comparison-with-bitcoin" title="Permalink to this headline">¶</a></h2>
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<p>Similarities:</p>
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<ul class="simple">
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<li>The basic notion of immutable states that are consumed and created by transactions is the same.</li>
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<li>The notion of transactions having multiple inputs and outputs is the same. Bitcoin sometimes refers to the ledger
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as the unspent transaction output set (UTXO set) as a result.</li>
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<li>Like in Bitcoin, a contract is pure function. Contracts do not have storage or the ability to interact with anything.
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Given the same transaction, a contract’s accept function always yields exactly the same result.</li>
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<li>Bitcoin output scripts are parameterised by the input scripts in the spending transaction. This is somewhat similar
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to our notion of a <em>command</em>.</li>
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<li>Bitcoin transactions, like ours, refer to the states they consume by using a (txhash, index) pair. The Bitcoin
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protocol calls these “outpoints”. In our prototype code they are known as <code class="docutils literal"><span class="pre">StateRefs</span></code> but the concept is identical.</li>
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<li>Bitcoin transactions have an associated timestamp (the time at which they are mined).</li>
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</ul>
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<p>Differences:</p>
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<ul class="simple">
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<li>A Bitcoin transaction has a single, rigid data format. A “state” in Bitcoin is always a (quantity of bitcoin, script)
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pair and cannot hold any other data. Some people have been known to try and hack around this limitation by embedding
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data in semi-standardised places in the contract code so the data can be extracted through pattern matching, but this
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is a poor approach. Our states can include arbitrary typed data.</li>
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<li>A Bitcoin transaction’s acceptance is controlled only by the contract code in the consumed input states. In practice
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this has proved limiting. Our transactions invoke not only input contracts but also the contracts of the outputs.</li>
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<li>A Bitcoin script can only be given a fixed set of byte arrays as the input. This means there’s no way for a contract
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to examine the structure of the entire transaction, which severely limits what contracts can do.</li>
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<li>Our contracts are Turing-complete and can be written in any ordinary programming language that targets the JVM.</li>
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<li>Our transactions and contracts have to get their time from an attached timestamp rather than a block chain. This is
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important given that we are currently considering block-free conflict resolution algorithms.</li>
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<li>We use the term “contract” to refer to a bundle of business logic that may handle various different tasks, beyond
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transaction verification. For instance, currently our contracts also include code for creating valid transactions
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(this is often called “wallet code” in Bitcoin).</li>
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</ul>
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</div>
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<div class="section" id="comparison-with-ethereum">
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<h2>Comparison with Ethereum<a class="headerlink" href="#comparison-with-ethereum" title="Permalink to this headline">¶</a></h2>
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<p>Similarities:</p>
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<ul class="simple">
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<li>Like Ethereum, code runs inside a relatively powerful virtual machine and can contain complex logic. Non-assembly
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based programming languages can be used for contract programming.</li>
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<li>They are both intended for the modelling of many different kinds of financial contract.</li>
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</ul>
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<p>Differences:</p>
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<ul class="simple">
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<li>The term “contract” in Ethereum refers to an <em>instantiation</em> of a program that is replicated and maintained by
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every participating node. This instantiation is very much like an object in an OO program: it can receive and send
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messages, update local storage and so on. In contrast, we use the term “contract” to refer to a set of functions, only
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one of which is a part of keeping the system synchronised (the verify function). That function is pure and
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stateless i.e. it may not interact with any other part of the system whilst executing.</li>
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<li>There is no notion of an “account”, as there is in Ethereum.</li>
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<li>As contracts don’t have any kind of mutable storage, there is no notion of a “message” as in Ethereum.</li>
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<li>Ethereum claims to be a platform not only for financial logic, but literally any kind of application at all. Our
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platform considers non-financial applications to be out of scope.</li>
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</ul>
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