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<title>Blockchain concepts - Catalyst Voting System - Core Technology</title>
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<ol class="chapter"><li class="chapter-item affix "><a href="../../00_prologue.html">Prologue</a></li><li class="chapter-item "><a href="../../01_intro.html"><strong aria-hidden="true">1.</strong> Introduction</a></li><li class="chapter-item expanded "><a href="../../02_core_ledger/index.html"><strong aria-hidden="true">2.</strong> Core Ledger</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item expanded "><a href="../../02_core_ledger/01_concepts/index.html"><strong aria-hidden="true">2.1.</strong> General Concepts</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item expanded "><a href="../../02_core_ledger/01_concepts/blockchain.html" class="active"><strong aria-hidden="true">2.1.1.</strong> Blockchain concepts</a></li><li class="chapter-item "><a href="../../02_core_ledger/01_concepts/network.html"><strong aria-hidden="true">2.1.2.</strong> Network overview</a></li><li class="chapter-item "><a href="../../02_core_ledger/01_concepts/node.html"><strong aria-hidden="true">2.1.3.</strong> Node organization</a></li><li class="chapter-item "><a href="../../02_core_ledger/01_concepts/stake.html"><strong aria-hidden="true">2.1.4.</strong> Stake</a></li></ol></li><li class="chapter-item "><a href="../../02_core_ledger/02_quickstart/index.html"><strong aria-hidden="true">2.2.</strong> Quickstart</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../02_core_ledger/02_quickstart/01_command_line.html"><strong aria-hidden="true">2.2.1.</strong> Command line tools</a></li><li class="chapter-item "><a href="../../02_core_ledger/02_quickstart/02_passive_node.html"><strong aria-hidden="true">2.2.2.</strong> Starting a passive node</a></li><li class="chapter-item "><a href="../../02_core_ledger/02_quickstart/03_rest_api.html"><strong aria-hidden="true">2.2.3.</strong> REST Api</a></li><li class="chapter-item "><a href="../../02_core_ledger/02_quickstart/04_explorer.html"><strong aria-hidden="true">2.2.4.</strong> Explorer mode</a></li><li class="chapter-item "><a href="../../02_core_ledger/02_quickstart/05_leader_candidate.html"><strong aria-hidden="true">2.2.5.</strong> How to start a node as a leader candidate</a></li></ol></li><li class="chapter-item "><a href="../../02_core_ledger/03_configuration/index.html"><strong aria-hidden="true">2.3.</strong> Configuration</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../02_core_ledger/03_configuration/leadership.html"><strong aria-hidden="true">2.3.1.</strong> Leadership</a></li><li class="chapter-item "><a href="../../02_core_ledger/03_configuration/logging.html"><strong aria-hidden="true">2.3.2.</strong> Logging</a></li><li class="chapter-item "><a href="../../02_core_ledger/03_configuration/mempool.html"><strong aria-hidden="true">2.3.3.</strong> Mempool</a></li><li class="chapter-item "><a href="../../02_core_ledger/03_configuration/network.html"><strong aria-hidden="true">2.3.4.</strong> Node network</a></li><li class="chapter-item "><a href="../../02_core_ledger/03_configuration/prometheus.html"><strong aria-hidden="true">2.3.5.</strong> Prometheus</a></li></ol></li><li class="chapter-item "><a href="../../02_core_ledger/04_jcli/index.html"><strong aria-hidden="true">2.4.</strong> jcli</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../02_core_ledger/04_jcli/address.html"><strong aria-hidden="true">2.4.1.</strong> Address</a></li><li class="chapter-item "><a href="../../02_core_ledger/04_jcli/certificate.html"><strong aria-hidden="true">2.4.2.</strong> Certificate</a></li><li class="chapter-item "><a href="../../02_core_ledger/04_jcli/genesis.html"><strong aria-hidden="true">2.4.3.</strong> Genesis</a></li><li class="chapter-item "><a href="../../02_core_ledger/04_jcli/key.html"><strong aria-hidden="true">2.4.4.</strong> cryptographic keys</a></li><li class="chapter-item "><a href="../../02_core_ledger/04_jcli/rest.html"><strong aria-hidden="true">2.4.5.</strong> REST</a></li><li class="chapter-item "><a href="../../02_core_ledger/04_jcli/transaction.html"><strong aria-hidden="true">2.4.6.</strong> Transaction</a></li><li class="chapter-item "><a href="../../02_core_ledger/04_jcli/vote.html"><strong aria-hidden="true">2.4.7.</strong> Voting</a></li></ol></li><li class="chapter-item "><a href="../../02_core_ledger/05_stake_pool/index.html"><strong aria-hidden="true">2.5.</strong> Staking with Jörmungandr</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../02_core_ledger/05_stake_pool/delegating_stake.html"><strong aria-hidden="true">2.5.1.</strong> Delegating your stake</a></li><li class="chapter-item "><a href="../../02_core_ledger/05_stake_pool/registering_stake_pool.html"><strong aria-hidden="true">2.5.2.</strong> Registering a stake pool</a></li><li class="chapter-item "><a href="../../02_core_ledger/05_stake_pool/retiring_stake_pool.html"><strong aria-hidden="true">2.5.3.</strong> Retiring a stake pool</a></li></ol></li><li class="chapter-item "><a href="../../02_core_ledger/06_advanced/index.html"><strong aria-hidden="true">2.6.</strong> Advanced</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../02_core_ledger/06_advanced/01_the_genesis_block.html"><strong aria-hidden="true">2.6.1.</strong> genesis file</a></li><li class="chapter-item "><a href="../../02_core_ledger/06_advanced/02_starting_bft_blockchain.html"><strong aria-hidden="true">2.6.2.</strong> starting a bft node</a></li><li class="chapter-item "><a href="../../02_core_ledger/06_advanced/03_starting_genesis_praos_blockchain.html"><strong aria-hidden="true">2.6.3.</strong> starting a genesis blockchain</a></li><li class="chapter-item "><a href="../../02_core_ledger/06_advanced/04_vote_fragments_voteplan_blockchain_relationships.html"><strong aria-hidden="true">2.6.4.</strong> How Vote plans, Vote Fragments and the blockchain transaction work and inter-relate</a></li></ol></li><li class="chapter-item "><a href="../../02_core_ledger/07_specs/index.html"><strong aria-hidden="true">2.7.</strong> Jormungandr Specifications</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../02_core_ledger/07_specs/migration.html"><strong aria-hidden="true">2.7.1.</strong> MIGRATION</a></li><li class="chapter-item "><a href="../../02_core_ledger/07_specs/network.html"><strong aria-hidden="true">2.7.2.</strong> Network</a></li></ol></li><li class="chapter-item "><a href="../../02_core_ledger/08_testing/index.html"><strong aria-hidden="true">2.8.</strong> testing</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../02_core_ledger/08_testing/automation.html"><strong aria-hidden="true">2.8.1.</strong> jormungandr-automation</a></li><li class="chapter-item "><a href="../../02_core_ledger/08_testing/hersir.html"><strong aria-hidden="true">2.8.2.</strong> Hersir</a></li><li class="chapter-item "><a href="../../02_core_ledger/08_testing/integration_tests.html"><strong aria-hidden="true">2.8.3.</strong> jormungandr-integration-tests</a></li><li class="chapter-item "><a href="../../02_core_ledger/08_testing/loki.html"><strong aria-hidden="true">2.8.4.</strong> Loki</a></li><li class="chapter-item "><a href="../../02_core_ledger/08_testing/mjolnir.html"><strong aria-hidden="true">2.8.5.</strong> Mjolnir</a></li><li class="chapter-item "><a href="../../02_core_ledger/08_testing/thor.html"><strong aria-hidden="true">2.8.6.</strong> Thor</a></li></ol></li><li class="chapter-item "><a href="../../02_core_ledger/09_internal_design/index.html"><strong aria-hidden="true">2.9.</strong> Internal Design</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../02_core_ledger/09_internal_design/01_auto-start.html"><strong aria-hidden="true">2.9.1.</strong> Automatic deployment of the voting blockchain</a></li><li class="chapter-item "><a href="../../02_core_ledger/09_internal_design/02_permissionless_auth.html"><strong aria-hidden="true">2.9.2.</strong> Permissionless Auth</a></li></ol></li></ol></li><li class="chapter-item "><a href="../../03_core_testing/index.html"><strong aria-hidden="true">3.</strong> Catalyst testing User Guide</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../03_core_testing/iapyx/index.html"><strong aria-hidden="true">3.1.</strong> Iapyx</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../03_core_testing/iapyx/iapyx.html"><strong aria-hidden="true">3.1.1.</strong> Iapyx</a></li><li class="chapter-item "><a href="../../03_core_testing/iapyx/load.html"><strong aria-hidden="true">3.1.2.</strong> Iapyx Load</a></li></ol></li><li class="chapter-item "><a href="../../03_core_testing/integration-tests/index.html"><strong aria-hidden="true">3.2.</strong> integration-tests</a></li><li class="chapter-item "><a href="../../03_core_testing/registration-service/index.html"><strong aria-hidden="true">3.3.</strong> Registration service</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../03_core_testing/registration-service/cli.html"><strong aria-hidden="true">3.3.1.</strong> Registration CLI</a></li><li class="chapter-item "><a href="../../03_core_testing/registration-service/configuration.html"><strong aria-hidden="true">3.3.2.</strong> Configuration</a></li></ol></li><li class="chapter-item "><a href="../../03_core_testing/registration-verify-service/index.html"><strong aria-hidden="true">3.4.</strong> Registration service</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../03_core_testing/registration-verify-service/cli.html"><strong aria-hidden="true">3.4.1.</strong> Registration Verify CLI</a></li><li class="chapter-item "><a href="../../03_core_testing/registration-verify-service/configuration.html"><strong aria-hidden="true">3.4.2.</strong> Configuration</a></li></ol></li><li class="chapter-item "><a href="../../03_core_testing/snapshot-service/index.html"><strong aria-hidden="true">3.5.</strong> Snapshot trigger service</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../03_core_testing/snapshot-service/cli.html"><strong aria-hidden="true">3.5.1.</strong> Registration CLI</a></li><li class="chapter-item "><a href="../../03_core_testing/snapshot-service/configuration.html"><strong aria-hidden="true">3.5.2.</strong> Configuration</a></li></ol></li><li class="chapter-item "><a href="../../03_core_testing/snapshot-wormhole/index.html"><strong aria-hidden="true">3.6.</strong> snapshot wormhole</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../03_core_testing/snapshot-wormhole/configuration.html"><strong aria-hidden="true">3.6.1.</strong> Configuration</a></li></ol></li><li class="chapter-item "><a href="../../03_core_testing/valgrind/index.html"><strong aria-hidden="true">3.7.</strong> valgrind</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../03_core_testing/valgrind/configuration.html"><strong aria-hidden="true">3.7.1.</strong> Configuration</a></li></ol></li><li class="chapter-item "><a href="../../03_core_testing/vitup/index.html"><strong aria-hidden="true">3.8.</strong> vitup</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../03_core_testing/vitup/configuration.html"><strong aria-hidden="true">3.8.1.</strong> Configuration</a></li><li class="chapter-item "><a href="../../03_core_testing/vitup/data_generation/index.html"><strong aria-hidden="true">3.8.2.</strong> Data Generation</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../03_core_testing/vitup/data_generation/reset.html"><strong aria-hidden="true">3.8.2.1.</strong> Configuration</a></li><li class="chapter-item "><a href="../../03_core_testing/vitup/data_generation/snapshot.html"><strong aria-hidden="true">3.8.2.2.</strong> Configuration</a></li></ol></li><li class="chapter-item "><a href="../../03_core_testing/vitup/data_generation.html"><strong aria-hidden="true">3.8.3.</strong> Data Generation</a></li><li class="chapter-item "><a href="../../03_core_testing/vitup/mock.html"><strong aria-hidden="true">3.8.4.</strong> Mock</a></li><li class="chapter-item "><a href="../../03_core_testing/vitup/mock_farm.html"><strong aria-hidden="true">3.8.5.</strong> Mock Farm</a></li><li class="chapter-item "><a href="../../03_core_testing/vitup/run_modes.html"><strong aria-hidden="true">3.8.6.</strong> Configuration modes</a></li></ol></li></ol></li><li class="chapter-item "><a href="../../04_core_vitss/index.html"><strong aria-hidden="true">4.</strong> Core VIT Servicing Station</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../04_core_vitss/testing.html"><strong aria-hidden="true">4.1.</strong> vit-servicing-station-tests</a></li></ol></li><li class="chapter-item "><a href="../../05_unified_platform/index.html"><strong aria-hidden="true">5.</strong> Unified Platform</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/index.html"><strong aria-hidden="true">5.1.</strong> Overview</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/01_cardano_nodes.html"><strong aria-hidden="true">5.1.1.</strong> Cardano Nodes</a></li><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/02_bridge_pipeline/index.html"><strong aria-hidden="true">5.1.2.</strong> Bridge Pipeline</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/02_bridge_pipeline/01_block_reader.html"><strong aria-hidden="true">5.1.2.1.</strong> Block Reader</a></li></ol></li><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/03_rest_http_service.html"><strong aria-hidden="true">5.1.3.</strong> REST HTTP Service</a></li><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/04_event_stream.html"><strong aria-hidden="true">5.1.4.</strong> Event Stream</a></li><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/05_database/index.html"><strong aria-hidden="true">5.1.5.</strong> Database</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/05_database/01_registration_db.html"><strong aria-hidden="true">5.1.5.1.</strong> Registrations Database</a></li><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/05_database/02_staked_ada_db.html"><strong aria-hidden="true">5.1.5.2.</strong> Staked ADA Database</a></li><li class="chapter-item "><a href="../../05_unified_platform/01_catalyst-cardano-bridge/05_database/03_transaction_state.html"><strong aria-hidden="true">5.1.5.3.</strong> Transaction State Database</a></li></ol></li></ol></li></ol></li><li class="chapter-item "><a href="../../06_rust_api/index.html"><strong aria-hidden="true">6.</strong> Rust API</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../06_rust_api/rust_api.html"><strong aria-hidden="true">6.1.</strong> Rust API Documentation and Packages</a></li><li class="chapter-item "><a href="../../06_rust_api/rust_style_guide.html"><strong aria-hidden="true">6.2.</strong> 🦀 Rust Style Guide</a></li></ol></li><li class="chapter-item "><a href="../../07_web_api/index.html"><strong aria-hidden="true">7.</strong> Web API</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../07_web_api/catalyst-core-api.html"><strong aria-hidden="true">7.1.</strong> Catalyst Core API V1</a></li><li class="chapter-item "><a href="../../07_web_api/dbsync-explorer.html"><strong aria-hidden="true">7.2.</strong> dbSync Explorer HTTP/REST API V1</a></li><li class="chapter-item "><a href="../../07_web_api/vit-servicing-station-v0.html"><strong aria-hidden="true">7.3.</strong> VIT Servicing Station HTTP/REST API V0</a></li><li class="chapter-item "><a href="../../07_web_api/vit-testing-mock-farm-v0.html"><strong aria-hidden="true">7.4.</strong> VIT Testing Mock Farm HTTP/REST API V0</a></li><li class="chapter-item "><a href="../../07_web_api/vit-testing-mock-v0.html"><strong aria-hidden="true">7.5.</strong> VIT Testing Mock HTTP/REST API V0</a></li><li class="chapter-item "><a href="../../07_web_api/vote-ledger-v0.html"><strong aria-hidden="true">7.6.</strong> Vote Ledger HTTP/REST API V0</a></li><li class="chapter-item "><a href="../../07_web_api/vote-ledger-v1.html"><strong aria-hidden="true">7.7.</strong> Vote Ledger HTTP/REST API V1</a></li></ol></li><li class="chapter-item "><a href="../../08_event-db/index.html"><strong aria-hidden="true">8.</strong> Event DB crate</a><a class="toggle"><div>❱</div></a></li><li><ol class="section"><li class="chapter-item "><a href="../../08_event-db/01_development.html"><strong aria-hidden="true">8.1.</strong> Event DB Local Development</a></li><li class="chapter-item "><a href="../../08_event-db/02_config-tables.html"><strong aria-hidden="true">8.2.</strong> General Configuration</a></li><li class="chapter-item "><a href="../../08_event-db/03_event-table.html"><strong aria-hidden="true">8.3.</strong> Event Definition Table</a></li><li class="chapter-item "><a href="../../08_event-db/04_challenge_tables.html"><strong aria-hidden="true">8.4.</strong> Challenge and Proposal Tables</a></li><li class="chapter-item "><a href="../../08_event-db/05_vote_plans.html"><strong aria-hidden="true">8.5.</strong> Vote Plan Tables</a></li><li class="chapter-item "><a href="../../08_event-db/06_snapshot_tables.html"><strong aria-hidden="true">8.6.</strong> Voter Voting Power Snapshot and Vote Storage Table</a></li><li class="chapter-item "><a href="../../08_event-db/07_automation_support.html"><strong aria-hidden="true">8.7.</strong> Catalyst Automation Support Tables</a></li><li class="chapter-item "><a href="../../08_event-db/08_vitss.html"><strong aria-hidden="true">8.8.</strong> VitSS Compatibility</a></li></ol></li><li class="chapter-item "><a href="../../97_CONTRIBUTING.html"><strong aria-hidden="true">9.</strong> Contributing to Catalyst Core</a></li><li class="chapter-item "><a href="../../98_CODE_OF_CONDUCT.html"><strong aria-hidden="true">10.</strong> Contributor Covenant Code of Conduct</a></li><li class="chapter-item "><a href="../../99_example_enhanced_markup.html"><strong aria-hidden="true">11.</strong> Example Enhanced Markup</a></li><li class="chapter-item affix "><a href="../../ZZ_suffix.html">Suffix</a></li></ol>
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<h1 class="menu-title">Catalyst Voting System - Core Technology</h1>
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<h1 id="blockchain-concepts"><a class="header" href="#blockchain-concepts">Blockchain concepts</a></h1>
<h2 id="time"><a class="header" href="#time">Time</a></h2>
<p>Slots represent the basic unit of time in the blockchain, and at each slot
a block could be present.</p>
<p>Consecutive slots are grouped into epochs, which have updatable size defined
by the protocol.</p>
<h2 id="fragments"><a class="header" href="#fragments">Fragments</a></h2>
<p>Fragments are part of the blockchain data that represent all the possible
events related to the blockchain health (e.g. update to the protocol), but
also and mainly the general recording of information like transactions and
certificates.</p>
<h2 id="blocks"><a class="header" href="#blocks">Blocks</a></h2>
<p>Blocks represent the spine of the blockchain, safely and securely linking
blocks in a chain, whilst grouping valid fragments together.</p>
<p>Blocks are composed of 2 parts:</p>
<ul>
<li>The header</li>
<li>The content</li>
</ul>
<p>The header link the content with the blocks securely together, while the
content is effectively a sequence of fragments.</p>
<h2 id="blockchain"><a class="header" href="#blockchain">Blockchain</a></h2>
<p>The blockchain is the general set of rules and the blocks that are periodically created.
Some of the rules and settings, can be changed dynamically in the system by updates,
while some other are hardcoded in the genesis block (first block of the blockchain).</p>
<pre><code class="language-text"> +-------+ +-------+
|Genesis+<-----+Block 1+<--- ....
|Header | |Header |
+---+---+ +---+---+
| |
+---v---+ +---v---+
|Genesis| |Block 1|
|Content| |Content|
+-------+ +-------+
</code></pre>
<h2 id="consensus"><a class="header" href="#consensus">Consensus</a></h2>
<p>The node currently support the following consensus protocol:</p>
<ul>
<li>Ouroboros BFT (OBFT)</li>
<li>Ouroboros Genesis-Praos</li>
</ul>
<p>Ouroboros BFT is a simple Byzantine Fault Tolerant (BFT) protocol where the
block makers is a known list of leaders that successively create a block and
broadcast it on the network.</p>
<p>Ouroboros Genesis Praos is a proof of stake (PoS) protocol where the block
maker is made of a lottery where each stake pool has a chance proportional to
their stake to be elected to create a block. Each lottery draw is private to
each stake pool, so that the overall network doesn’t know in advance who can
or cannot create blocks.</p>
<p>In Genesis-Praos slot time duration is constant, however the frequency of
creating blocks is not stable, since the creation of blocks is a probability
that is linked to the stake and consensus_genesis_praos_active_slot_coeff.</p>
<p><strong>Note</strong>: In Genesis-Praos, if there is no stake in the system, no blocks will be
created anymore starting with the next epoch.</p>
<h2 id="leadership"><a class="header" href="#leadership">Leadership</a></h2>
<p>The leadership represent in abstract term, who are the overall leaders of the
system and allow each individual node to check that specific blocks are
lawfully created in the system.</p>
<p>The leadership is re-evaluated at each new epoch and is constant for the
duration of an epoch.</p>
<h2 id="leader"><a class="header" href="#leader">Leader</a></h2>
<p>Leader are an abstraction related to the specific actor that have the ability
to create block; In OBFT mode, the leader just the owner of a cryptographic
key, whereas in Genesis-Praos mode, the leader is a stake pool.</p>
<h2 id="transaction"><a class="header" href="#transaction">Transaction</a></h2>
<p>Transaction forms the cornerstone of the blockchain, and is one type of fragment
and also the most frequent one.</p>
<p>Transaction is composed of inputs and outputs; On one side, the inputs represent
coins being spent, and on the other side the outputs represent coins being received.</p>
<pre><code class="language-text"> Inputs Alice (80$) Bob (20$)
\ /
\ /
-----------
100$
---------
/ \
Outputs Charlie (50$) Dan (50$)
</code></pre>
<p>Transaction have fees that are defined by the blockchain settings and the following invariant hold:</p>
<p>\( \sum Inputs = \sum Outputs + fees \)</p>
<p>Transaction need to be authorized by each of the inputs in the transaction by their respective witness.
In the most basic case, a witness is a cryptographic signature, but depending on the type of input can
the type of witness vary.</p>
<h2 id="accounting"><a class="header" href="#accounting">Accounting</a></h2>
<p>The blockchain has two methods of accounting which are interoperable:</p>
<ul>
<li>Unspent Transaction Output (UTXO)</li>
<li>Accounts</li>
</ul>
<p>UTXO behaves like cash/notes, and work like fixed denomination ticket that are
cumulated. This is the accounting model found in Bitcoin. A UTXO is uniquely
reference by its transaction ID and its index.</p>
<p>Accounts behaves like a bank account, and are simpler to use since exact amount
can be used. This is the accounting model found in Ethereum. An account is
uniquely identified by its public key.</p>
<p>Each inputs could refer arbitrarily to an account or a UTXO, and similarly
each outputs could refer to an account or represent a new UTXO.</p>
<footer id="open-on-gh">Found a bug? <a href="https://github.com/input-output-hk/catalyst-core/edit/main/book/src/02_core_ledger/01_concepts/blockchain.md">Edit this page on GitHub.</a></footer>
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