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Encyclopedia

This article is the reference material to consult the concepts used in Hathor documentation.

A​

Atomic swaps​

Atomic swaps is a blockchain feature used to trade in a trustless manner. In the blockchain jargon, such trades are also called atomic swaps.

A blockchain can implement atomic swaps with different mechanisms, but in all of them the principle is the same: transfers of assets from different participants are bound together in such a manner that, either all transfers happen or none.

B​

Blockchain​

Blockchain is a polysemic term that can mean either a data structure, a database, or a technology.

When referred to as a data structure, blockchain is a chain of blocks used to implement an append-only database.

When referred to as a database, blockchain is a virtually immutable electronic ledger, that is the core component of blockchain technology.

When referred to as a technology, blockchain can be defined based on what it offers: an information system for transaction recording and processing that is safe (no loss or mutability of data possible), transparent (easy verification and tracing), and trustless (confidence of transacting without any intermediary).

Still, when referred to as a technology, blockchain can also be defined based on what it comprises: a decentralized information system with five constituent components: decentralized networking, mathematical cryptography, distributed consensus, transaction ledger, and smart contracts.

Sources: BSI, 2019, p. 9 1; Treiblmaier and Clohessy, 2020, p. 5 2; Tran et al., 2022, p. 6 3.

Bookkeeping model​

Bookkeeping model is an attribute of blockchain technologies that denotes how it records the state of the system and the transitioning from one state to another. The two most common bookkeeping models for blockchains are:

  • UTXO model; and
  • account-based model.

For wallets' bookkeeping, Hathor uses the UTXO model, as is in Bitcoin. Hence, it does not keep track of the state of wallets. As a result, every time an application loads a wallet, the application needs to compute the balance of this wallet.

In contrast, for contracts' bookkeeping, Hathor uses the account-based model, as is in Ethereum. Therefore, what we have in Hathor is a hybrid bookkeeping model.

D​

Digital asset​

Digital asset is an asset whose whole life cycle takes place digitally and electronically.

For example, common fiat currency is not considered a digital asset, even though we can manage it in a digital manner (online bank account), because part of its life cycle takes place outside the digital world. On the other hand, a CBDC (Central Bank Digital Currency) is a digital asset, because its whole life cycle takes place digitally.

Other example, a common property deed is not a digital asset, because although the most used form is as a record in a digital database system from a registry, there may be physical copies on paper as backup or physical copies may be issued as originals. On the other hand, the same property deed, once recorded in a blockchain, is a digital asset.

DLT​

Distributed Ledger Technology (DLT) is a synonym of blockchain technology.

The term was coined to describe the set of all technologies that implement decentralized electronic ledgers, either or not using the same design of blockchain technologies.

However, at the moment, there has yet to be a consensus among practitioners and researchers in the blockchain industry concerning the boundaries between DLT and its subset blockchain.

Different organizations use the term DLT for different purposes. To avoid confusion, we opted to use DLT as a synonym for blockchain.

Sources: Lipton and Treccani, 2021, p. 3 4; Treiblmaier and Clohessy, 2020, p. 1 2; Baran, 1962, p. 3 5.

H​

Hathor​

Hathor is a blockchain (i.e., DLT) technology with two main differentials:

  • It is highly scalable without weakening security and decentralization.
  • It is easy to use, implementing sophisticated features — which in other blockchains require smart contracts — as built-in or off-the-shelf solutions.

S​

Smart contract​

Smart contract is a software that is stored on, executed by, and has its outputs recorded on a blockchain network.

Moreover, a smart contract also:

  • runs on full nodes within a blockchain network, thus, in a decentralized and trustworthy manner;
  • can serve as an agreement among parties;
  • can represent terms in a contract in law and create a legally enforceable obligation under the legislation of an applicable jurisdiction.

Source: ISO 22739:2020 6.

Snapshot​

Snapshot is a file that reflects the state of the ledger at a particular moment in time, and can be used to recreate this state.

The primary use case for snapshots is expediting the synchronization of a node with its blockchain network. Synchronization is an ongoing process by which all nodes of the network maintain the same ledger. However, syncing a node from an empty database (from genesis block) or after being offline for a long period can take a long time.

As of February 2024, syncing from genesis block takes on average 10 hours for Hathor Network testnet and 24 hours for mainnet. As time passes and the ledger grows, the time required for initial syncing tends to increase. Snapshots allow nodes to rapidly catch up with the network.

Beyond this, snapshots have the following use cases:

  • Airdrops
  • Token migrations (from one blockchain network to another)
  • Auditing
  • Hard forks
  • Blockchain analysis

Hathor Labs periodically takes snapshots of Hathor Network ledger and provides them at the following locations:

T​

Token​

Token is a digital asset that represents another asset (digital or not).

In other words, a token is anything used to represent an asset. For example, a property deed of a house, represent ownership over a real estate property.

The main point of confusion is that once issued to represent an asset — i.e., the value of other thing — a token may have an economic life on its own; they are traded, transferred, etc. Thus, beyond being a representation of an asset, a token may end up also becoming an asset itself.

The word 'token' is not used in the jargon of traditional economy, i.e., nobody refer to a property deed as a 'token'. However, in the context of the new economy, ushered by blockchain technology, the term token is spreadly used, in this precise meaning.

Actions upon tokens:

  • Create: process of stating the existence of a new token on a blockchain.
  • Issue: process of assigning an amount of a previously created token to wallets on a blockchain.
  • Mint: process of use an amount of a token to issue an amount of other token on a blockchain.
  • Melt: process of reverse a previously made minting process.

Trade​

Trade is an exchange of predefined and agreed amounts of multiple assets among multiple parties.

This implies the occurrence of at least two transfers of assets among at least two parties. For example, when you go to a bakery to buy bread, this event is a trade between you and the shop, composed of two transfers of assets, where you transfer cash to it, and it transfers bread to you.

W​

Wallet system​

Wallet system comprises the software and hardware that implements a wallet for one or multiple blockchains. From a user's perspective, a wallet is analogous to a bank account, and wallet systems are analogous to banking applications, cashiers, and ATMs.

A wallet system has three main sets of functions:

  • generating, storing, and handling cryptographic keys;
  • aggregating and presenting transaction data (e.g., balance of funds) associated with such keys; and
  • creating, signing, and submitting transactions to the network.

From a functional viewpoint, the architecture of a wallet system generally comprises four components:

  • a network node
  • an indexer
  • a keystore
  • a wallet application

The wallet system relies on a network node — either full or light — to track the state of the entire ledger. In turn, an indexer tracks the state of specific wallets. A keystore persist private keys, and finally, a wallet application is the central point of interaction between the user, the keys required to transact, and an indexer proxying for a node.

From a structural viewpoint, the architecture of a wallet system generally comprises multiple of the following components:

  • wallet library
  • wallet application
  • hardware wallet
  • paper wallet
  • brain wallet

Sources: Lipton and Treccani, 2021, p. 264 4; ISO 22739:2020 6.

Footnotes​

  1. BSI, Towards Secure Blockchains: Concepts, Requirements, Assessments, Federal Office for Information Security: German Government, Bonn, Germany, May 2019. [Online]. Available: https://www.bsi.bund.de/SharedDocs/Downloads/EN/BSI/Crypto/Secure_Blockchain.html ↩

  2. H. Treiblmaier and T. Clohessy, Blockchain and Distributed Ledger Technology Use Cases. Springer-Verlag GmbH, 2020. ↩ ↩2

  3. D. A. Tran, M. T. Thai, and B. Krishnamachari, Handbook on Blockchain. Springer International Publishing AG, 2022. ↩

  4. A. Lipton and A. Treccani, Blockchain and Distributed Ledgers Mathematics, Technology, and Economics. World Scientific Publishing Co Pte Ltd, 2021. ↩ ↩2

  5. P. Baran, On Distributed Communications Networks, Manuscript, 1962. ↩

  6. ISO, 22739:2020 — Blockchain and distributed ledger technologies — Vocabulary. ISO, 2020. [Online]. Available: https://www.iso.org/obp/ui/#iso:std:iso:22739:ed-1:v1:en ↩ ↩2