Walport, Mark. Distributed Ledger Technology: beyond block chain. A report by the UK Government Chief Scientific Adviser (Government Office for Science, 2016).
address (p.51): This approach could be used to enforce some Know Your Customer rules, because once a particular wallet address is identified and linked with a physical person, it is possible to uncover all of their transactions. (†2332)
blockchain (p.17): A block chain is a type of database that takes a number of records and puts them in a block (rather like collating them on to a single sheet of paper). Each block is then ‘chained’ to the next block, using a cryptographic signature. This allows block chains to be used like a ledger, which can be shared and corroborated by anyone with the appropriate permissions. · There are many ways to corroborate the accuracy of a ledger, but they are broadly known as consensus (the term ‘mining’ is used for a variant of this process in the cryptocurrency Bitcoin). If participants in that process are preselected, the ledger is permissioned. If the process is open to everyone, the ledger is unpermissioned. · The real novelty of block chain technology is that it is more than just a database — it can also set rules about a transaction (business logic) that are tied to the transaction itself. This contrasts with conventional databases, in which rules are often set at the entire database level, or in the application, but not in the transaction. (†2057)
blockchain (p.34): What is ‘the block chain’? A block is simply a list of payments. A block chain is a list of blocks, each one referring back
to the one that went before. However, when people talk about the block chain, they tend to mean the collection of technologies and techniques that underpin the Bitcoin system, which other projects have used as inspiration because they solve unrelated problems in
finance and elsewhere. (†2123)
cryptocurrency (p.33): Bitcoin is a new form of digital cash. Rather than being issued by a central bank, such as the Bank of England, its issuance is controlled by a decentralised network of computers. This network relies on cryptography and other techniques to regulate the supply of Bitcoins and keep track of who owns them. Bitcoin is consequently known as a cryptocurrency. (†2331)
distributed ledger technology (p. 5): A distributed ledger is essentially an asset database that can be shared across a network of multiple sites, geographies or institutions. All participants within a network can have their own identical copy of the ledger. Any changes to the ledger are reflected in all copies in minutes, or in some cases, seconds. The
assets can be financial, legal, physical or electronic. The security and accuracy of the assets stored in the ledger are maintained cryptographically through the use of ‘keys’ and signatures to control who can do what within the shared ledger. Entries can also be updated by one, some or all of the participants, according to
rules agreed by the network. (†2045)
distributed ledger technology (p.33): Banks keep track of customer balances on a ledger. Bitcoin also uses a ledger,
but it is maintained collaboratively by the decentralised network of computers,
and is known as a distributed ledger. (†2124)
immutability (p.56): By using an immutable block chain to hold this data, the ledger could provide transparency around all diamonds, revealing their origin, trail of ownership, and the processes they might have undergone. (†2326)
mining (p.5): Anyone with access to the internet and the computing power to solve the cryptographic puzzles can add to the ledger and they are known as ‘Bitcoin miners’. The mining analogy is apt because the process of mining Bitcoin is energy intensive as it requires very large computing power. (†2125)
node (p.60): Transactions are added to the database in blocks, and each block is reviewed by the nodes. The
block is only added to the database if the node reaches a consensus that the block only contains valid transactions. (†2126)
permissioned blockchain (p.78): Private block chains are being used in closed commercial communities to support digital trust mechanisms, under their own rules. These are noninteroperable and cannot scale to support supply chains (†2127)
permissionless blockchain (p.35): businesses often find ‘permissioned’ block chains far more appealing than Bitcoin’s unpermissioned model, because specific parties are authorised to verify transactions. (†2128)
smart contract (p.18): Smart contracts are contracts whose terms are recorded in a computer language instead of legal language. Smart contracts can be automatically executed by a computing system, such as a suitable distributed ledger system. · The potential benefits of smart contracts include low contracting, enforcement, and compliance costs; consequently it becomes economically viable to form contracts over numerous low-value transactions. The potential risks include a reliance on the computing system that executes the contract. At this stage, the risks and benefits are largely theoretical because the technology of smart contracts is still in its infancy, and some time away from widespread deployment. (†2129)
transaction (p.27): A block chain technology can help by showing the chain of transactions (reconciliation through cryptography), and the actors involved, in a way that is transparent to a regulator. In addition, auditing this data is expensive and happens after the trade has taken place. (†2277)
wallet (p.47): For individual users, the system can also achieve a high degree of security — in order to move the bitcoins held in a wallet, an attacker must know the private key associated with a given public key (which is where the bitcoins are held). (†2330)
