Blockchain Data Layer and Digital Contracts Research Guide

Glossary

Term Definitions Blockchain A distributed database that records information in a secure, transparent, and tamper-proof manner. Block The basic unit in a blockchain, containing a set of verified transaction records. Hashing Algorithm An algorithm that converts input data of arbitrary length into output data of fixed length, the output data is called a hash value. Hash Value Fixed-length output data generated by a hash algorithm, used to verify the integrity of the data. Private Blockchain A blockchain controlled by a single entity with limited access and permissions. Public Blockchain A blockchain in which anyone can participate and verify transactions, such as Bitcoin. Data Layer A layer that stores and manages data, such as the blockchain data layer. Data Record A unit of information stored in the data layer, such as a transaction record. Digital Contract A self-executing contract written in code and stored on a blockchain. Contract Identifier An identifier used to uniquely identify a digital contract. Contractual Parameters Parameters that define the terms and conditions of a digital contract. Virtual Machine A software environment that executes digital contract code. Cryptocurrency A digital or virtual currency that is secured using cryptography. Cryptographic Token A digital token that represents a digital asset or access rights that can be securely traded using cryptography. Transaction Record Information that records cryptocurrency or digital asset transactions. Single Cryptographic Address A unique address used to identify a user or entity in a blockchain network

What are the main functions of the Factom protocol? .

What is the role of digital contracts in a blockchain environment? .

Explain the difference between private and public blockchains. .

What are cryptographic tokens and how are they used to access private blockchains? .

What role does the data layer server play in processing digital contracts? .

Explain the purpose of virtual machines in executing digital contracts. .

What is a contract identifier and how is it used to manage digital contracts? .

Explain how the blockchain data layer is used to provide evidence of the execution of digital contracts. .

What is a decision table and how is it used in digital contracts? .

Explain the importance of geographic parameters in certain digital contracts. .

Short Answer Question

The Factom protocol effectively decouples any blockchain (e.g., the Bitcoin blockchain) from its cryptocurrency (e.g., Bitcoin). It provides client-defined chains of entries, client-side validation, a distributed consensus algorithm for recording entries, and a blockchain anchoring method for security.

Digital contracts are written in code and automatically executed on the blockchain. They provide a secure, transparent, and tamper-proof way to automatically enforce agreements and manage transactions.

Private blockchains are controlled by a single entity with restricted access and permissions. Whereas public blockchains allow anyone to join the network and participate in the transaction validation process, such as Bitcoin.

A crypto token is a digital token that represents a digital asset or access rights. In the context of a private blockchain, entities can use crypto tokens to control and manage access to the network and the data stored on it.

The data layer server is responsible for managing and maintaining the blockchain data layer. In digital contracts, it receives, validates, and records data related to the execution of the contract, acting as an immutable system of record.

A virtual machine provides an isolated software environment to execute digital contract code. This isolation ensures that the contract is executed in a secure and controllable environment, preventing any potential vulnerabilities or errors from affecting the underlying blockchain network.

A contract identifier is an alphanumeric code that uniquely identifies a digital contract. It is used to locate and retrieve information related to a specific contract, such as its terms, conditions, and execution history, in the blockchain data layer.

The blockchain data layer acts as a public, immutable ledger of all transactions and contract executions. By recording cryptographic proofs of every step associated with a digital contract, it provides undeniable evidence of the execution, integrity, and verifiability of the contract.

A decision table is a method of representing complex decision logic in a matrix form. In digital contracts, decision tables can be used to define contract terms and conditions that automatically execute actions based on predefined conditions and rules.

Some digital contracts may contain geographic parameters that impose restrictions or requirements on the execution or compliance of contract terms within a specific geographic region. This is critical for compliance with international law, data privacy regulations, or contractual obligations that are unique to a specific regional market.