theory lecture 3

Question 1

business networks

Answer 1

benefit from connectivity, eg. connected customers, suppliers, banks, and partners. they cross geographical and regulatory boundaries.

Question 2

wealth

Answer 2

generated by the flow of goods and services across a business network. markets are central to this process.

Question 3

asset

Answer 3

anything that is capable of being owned or controlled to produce value.

Question 4

intangible assets

Answer 4

(1) financial, (2) intellectual, or (3) digital.

Question 5

cash

Answer 5

an asset with the property of anonimity

Question 6

ledger

Answer 6

the system of record for a business that records asset transfer between participants. a business will have multiple ledgers for multiple business networks in which it participates. it is inefficient, expensive, and vulnerable.

Question 7

participants of a business network

Answer 7

usually reside in an organisation and have specific identities and roles, eg. customer, supplier, government, and regulator.

Question 8

transaction

Answer 8

an asset transfer.

Question 9

contract

Answer 9

the conditions for a transaction to occur.

Question 10

shared ledger

Answer 10

it provides consensus, provenance, immutability, and finality. it records all transactions across a business network and is shared between participants who have their own copy through replication. it is permissioned, so participants see only appropriate transactions (with blockchain, that is every transaction).

Question 11

blockchain

Answer 11

underpins bitcoin. it is the most popular way to validate transactions in cryptocurrency.

Question 12

bitcoin

Answer 12

unregulated, censorship-resistant shadow currency. it ensures “cash like” coin that is (1) unique, (2) immutable, and (3) final. it is the first blockchain application.

Question 13

hash value

Answer 13

the mapping of a number to another number. it is a function and is the way the chain is formed.

Question 14

data block

Answer 14

the set of transactions.

Question 15

smart contract

Answer 15

the business rules implied by the contract. it is embedded in blockchain and executed with the transaction. it is verifiable and signed and encoded in the programming language. eg., contractual conditions under which corporate bond transfer occurs.

Question 16

“pluggable” consensus

Answer 16

means that the majority has to agree with the transaction to be accepted. this is necessary for industrial blockchain.

Question 17

internal ledger

Answer 17

ledger for internal reporting, audit, and compliance. it provides a consistent view of key business assets. the provenance, immutability, and finality are more important than consensus. it gives access to the auditor and regulator.

Question 18

consortium shared ledger

Answer 18

created by a small set of participants. it shares reference data between themselves and consumers. it is consistent real-time view of key information.

Question 19

information hub

Answer 19

a ledger set up in a single organisation. it shares information between participants. assets have information, not financial value. it requires provenance, immutability, and finality.

Question 20

high value market

Answer 20

ledger for the transfer of high financial value assets. it is between many participants in a market and requires all enterprise features of blockchain.

Question 21

proof of stake

Answer 21

a validation method where fraudulent transactions cost validators. it is an alternative to proof of work.

Question 22

multi-signature

Answer 22

method for validation where eg. 3 out of 5 participants have to agree. it is an alternative to proof of work.