In this Blockchain Activity, we will learn the basics of blockchain technology and apply our knowledge in an accounting context. We outline specific learning objectives for this activity as follows:
Learning Objectives [Slide 2]1
• LO1: Gain a basic understanding of blockchains and three technologies associated with blockchains (peer-to-peer networking, public key cryptography, and proof-of-work):
• LO1a: Understand concepts related to peer-to-peer networking.
• LO1b: Gain a basic understanding of SHA-256 hashing, a nonce, and how it applies to public key cryptography
• LO1c: Understand the role of proof-of-work in managing the immutability of the blockchain.
• LO2:Understand concepts associated with a distributed ledger and how a blockchain can be used to create a distributed ledger.
• LO3: Apply the blockchain concepts and understand the implications of blockchains to accounting.

1 Slide numbers [in brackets] serve as a reference point and guide as you complete the activity.

Learning Objectives

Part 1: “Preparation”- Understanding Blockchains and Bitcoins
[Slides 3-32]

Introduction to Blockchain [Slides 3-4]
Let’s start by watching a video on bitcoins: Bitcoin: How Cryptocurrencies Work (SciShow) (9:24) https://www.youtube.com/watch?v=kubGCSj5y3k
A Blockchain protocol operates on the Internet using a P2P network of computers that run the Blockchain protocol and hold an identical copy of the ledger of transactions, enabling transactions without a middleman though machine consensus.
The blockchain itself is a file – a shared and public ledger of transactions that records all transactions from the genesis block (first block) to the present.
In order to understand blockchains, we will focus on understanding three technologies:
• Peer-to-Peer Networking [Slides 5-8]
• SHA-256 Hashing, and Cryptography [Slides 9-25]
• Proof-of-Work (Game Theory) [Slides 26-29]
Note that Bitcoin is a specific implementation of the Blockchain protocol and utilizes a blockchain to store transactions.
Answer the following questions:

1. In bitcoins, the stores the information from all previous transactions plus the timestamp
   / ID of the current transactions.
   Peer-to-Peer Networking [Slides 6-8]
2. What is “Peer-to-Peer Networking?” Find a definition on the Internet and include the source of your definition.
3. Which of the following examples use peer-to-peer networking?
   a. BitTorrent sites (e.g., The Pirate Bay)
   b. Massively Multiplayer Online (MMO) games (e.g., World of Warcraft)
   c. Blockchain / Bitcoin
   d. All of the above
4. True or False: Peer-to-Peer networks are also commonly used for illicit activities such as illegally sharing copyrighted content like movies, music, software or games.

Hexadecimal, Hashing, and Cryptography [Slides 9 – 13]

5. Fill in the following chart. The Decimal System has been completed for you.

Numbering System Name Base Digits in the Numbering System
Decimal System 10 { 0,1,2,3,4,5,6,7,8,9 }
Hexadecimal System
Binary System

6. Convert the following numbers to their equivalent numbers in the given base. Hint: You can use the “Programmer” calculator available on Windows.

Decimal Representation Binary Representation Hexadecimal Representation
126
256
255
24
1
12

Hashing [Slides 14-25]

7. What is hashing? Find a definition on the Internet and include the source of your definition.
8. True or False: A hash can be easily decrypted back to the original text.
9. True or False: Even if only one symbol is changed in a hash input, the algorithm will produce a different hash value.
10. Go to a SHA-256 Hash Calculator and compute the hash value for the following. Make sure you type the “Hash Input” exactly as specified, with no spaces before or after the input string.

Example: https://xorbin.com/tools/sha256-hash-calculator

Hash Input SHA-256 Hash
Hi 3639efcd08abb273b1619e82e78c29a7df02c1051b1820e99fc395dcaa3326b8
Blockchain
blockchain
Your First Name and Last Name,
e.g. “John
Jones” (no quotes)

Proof of Work [Slides 26 – 29]

11. What is meant by “Proof of Work” with respect to blockchains and bitcoins? Find a definition from the Internet and cite the source in your response.
12. True or False: A hash puzzle is analogous to a combination lock.
    Putting it all together: The Blockchain [Slides 30 – 32]
13. Review the Deloitte article: “Democratized trust: Distributed ledgers and the future of value.” Order the following steps regarding how blockchains work as described in the article (Figure 1).

Step (1-7) Description
Structure: Each block is identified by a hash, a 256-bit number, created using an algorithm agreed upon by the network. A block contains a header, a reference to the previous block’s hash, and a group of transaction. The sequence of linked hashes creates a secure, interdependent chain.
The Chain. When a block is validated, the miners that solved the puzzle are rewarded and the block is distributed though the network. Each node adds the block to the majority chain, the network’s immutable and auditable blockchain.
Transaction: Two parties exchange data; this could represent money, contracts, deeds, etc.

Validation. Blocks must first be validated to be added to the blockchain. The most accepted form of validation for open-source blockchains is proof of work – the solution to a mathematical puzzle derived from the block’s header.
Built-in Defense. If a malicious miner tries to submit an altered block, then all of the following (subsequent) blocks would change. The other notes would detect the change and reject the modified block.
Verification: Depending on the network’s parameters, the transaction is either verified instantly or transcribed into a secured record and placed in a queue of pending transactions.
Blockchain mining: Miners try to “solve” the block by making incremental changes to one variable until the solution satisfies a network-wide target. This is called “proof of work” because correct answers cannot be falsified.

Scenario [Slide 34]

Part 2: ”Do” the Blockchain Activity
[Slides 33-53]

We are creating a blockchain to develop a distributed ledger to track the sales of a candy bar known as “CB1.” Our company sells CB1 at various prices (in U.S. dollars). We want to create an immutable record of the sales transactions (i.e., the transactions cannot be altered).

Key information for this activity includes:
• We will be tracking the date, time, BuyerID, SellerID, asset type, and transaction amount.
• We have three authorized users (Sally, John, and Caroline) with ID numbers of (001, 002, and 003) respectively.
• We will be processing five transactions and linking the transactions into a distributed ledger based on blockchain concepts.
To correctly complete a block in the blockchain, we must perform a hashing task for each transaction. This task consists of three steps: determine the hash input string, determine an appropriate nonce, and record the results.

Assumptions & Difficulty-Level Restriction [Slide 35]
Simplifying Assumptions
• We will only be using the first 8 digits of the hash value in our blockchain
• Different fields within a transaction are delimited by a “-”
• We only have one transaction per block.

Difficulty-Level Restriction: Hash value results must start with one single leading “0”.
• For example, the hash vale “0abc1234” abides by restriction but the hash value “1234abc0” does not.
• What nonce will work?
• In cryptography, a nonce is an arbitrary number that can be used just once in a cryptographic communication.
• It is often a random or pseudo-random number issued in an authentication protocol to ensure that old communications cannot be reused in replay attacks.

Transactions
In the following section, you will read each transaction’s details and perform the hashing task previously described.

Transaction #1 [Slides 35-37]
Sally buys a CB1 bar from John for $1.25. This will be the first transaction in our blockchain.

Date Time Buyer ID Seller ID Asset Amount Transaction Format
6/18/2019 14:05:00 001 002 CB1 1.25 06182019-14:05:00-001-002-CB1-1.25

Step 1: Determine the Hash Input String
The hash input string consists of {the previous hash + the current transaction + the nonce value}. Note that the three parts of the hash input string (Previous Hash, Current Transaction, Nonce) are delineated by a “+” symbol.

Previous Hash + Current Transaction + Nonce
00000000 06182019-14:05:00-001-002-CB1-1.25 xxxx
Note: Use “00000000” (no quotes) for the “Previous Hash” field in the first block. This identifies a block as the “genesis” (i.e., first) block.
Corresponding Hash Input:

Step 2: Determine the nonce
Problem: What nonce will work for the “xxxx”? Go to a SHA-256 generator site, e.g.: https://www.xorbin.com/tools/sha256-hash-calculator

Task: Find the value of “xxxx” which will return a hashed value starting with a leading “0”
Hash the “transaction information + xxxx” with various values for “xxxx” until you find a nonce that will return a hashed value with a leading 0. In the table below, a nonce of “0000” returns a hash output with a leading “e.” What does a nonce of “0001” and “0002” return? Complete the table below. Hint: Make sure your hash input does not have any extra characters at the end of it, such as a space or a new line. Otherwise, you will get a different hash output.

Hash Input Hash Output
00000000+06182019-
14:05:00-001-002-
CB1-1.25+0000
00000000+06182019-
14:05:00-001-002-
CB1-1.25+0001
00000000+06182019-
14:05:00-001-002-
CB1-1.25+0002

Step 3: Record the Results
A nonce of “0002” will work in that it returns a hash output with one leading zero (0). Therefore, we will add the transaction to the list; the previous hash block is “00000000”; the current hash is “028848af” (the first 8 digits of the hash output); and the nonce is “0002” as illustrated below.

Record the information below.

A nonce of “0002” is just one of many possible solutions. For example, a nonce of “0007” would also return an output (hash) with a leading 0.

How do you know which nonce to use?
This is part of the proof of work. All of the nodes in the peer-to-peer network are competing to find a nonce. The first nonce that is found meeting the requirement (i.e. one leading zero) is announced to the network and that miner is awarded a “prize.” The data associated with that nonce are then incorporated into the chain.
Transaction #2 [Slides 38-39]
The next day (6/19/2019), Sally buys another CB1 bar from John for $1.29.

Date Time Buyer ID Seller ID Asset Amount Transaction Format
6/19/2019 12:05:00 001 002 CB1 1.29 06192019-12:05:00-001-
002-CB1-1.29

Step 1: Determine the Hash Input String
What is the previous hash (the current hash in Block #1)?
What is the Transaction Format for Transaction #2?
What is the hash input string?

Step 2: Determine the nonce
What nonce will work for the “xxxx” to return a hash with one leading zero?
Hint: You can try various digits, but one nonce that will work is between 0030 and 0050.

Step 3: Record the Results
Once you have found a nonce, fill out the information for Block #2:

Transaction #3 [Slides 40-41]
The next day (6/20/2019), Sally buys another CB1 bar from John for $2.99.

Date Time Buyer ID Seller ID Asset Amount Transaction Format
6/20/2019 11:30:00 001 002 CB1 2.99 06202019-11:30:00-001-002- CB1-2.99

Step 1: Determine the Hash Input String What is the previous hash?
What is the Transaction Format for Transaction #3?
What is the hash input string?

Step 2: Determine the nonce
What nonce will work for the “xxxx” to return a hash with one leading zero? Hint: You can try various digits, but one nonce that will work is between 0000 and 0020.
Once you have found a nonce, fill out the information for Block #3: Step 3: Record the results

Rogue Transaction #2X [Slides 42 – 44]
Blockchains are immutable in that transactions cannot be altered. What if someone wants to change the blockchain?
Let’s go back to Transaction #2 and attempt to modify the transaction.

ORIGINAL Transaction #2: The next day (6/19/2019), Sally buys another CB1 bar from John for $1.29
MODIFIED Transaction #2X: The next day (6/19/2019), Sally buys another CB1 bar from John for $11.29

How can we try to change Transaction #2?
The current blockchain looks like this, with Block #2 containing the price of $1.29. Verify that your values for blocks 1, 2, and 3 match the figure below (assuming you identified the same nonce values).

We now want to modify Block 2 to have a price of $11.29. In Block 2, this will impact the CURRENT HASH and the NONCE, as well as have implications for Block 3.
Step 1: Determine the Hash Input String What is the previous hash?
What is the Transaction Format for Transaction #2?
What is the hash input string?

Step 2: Determine the nonce
What nonce will work for the “xxxx” to return a hash with one leading zero? Hint: One nonce that will work is between 0000 and 0020.
Step 3: Record the results

Blockchain Resulting from Rogue Transaction #2X [Slides 45-46]
The blockchain now looks like the following, but there is a problem with the link between Block 2x and Block 3. The “Previous Block Hash” in Block 3 refers to the original Block 2 (not Block 2x).

What happens if we just try to replace the “Previous Block Hash” in block 3 (0a1b1079) with the “current hash” from Block 2x (0b394db6)?
Hash the following hash input string, which replaces the “Previous Block Hash” in block 3 with the current hash from Block 2X. Note that we are using the nonce of “0012” which is associated with block 3.
Hash Input:

Hash output:

What is the problem with this hash output?

Transaction #3X [Slides 47-48]
Modify Block 3 so that the blockchain will be valid, i.e. the blockchain will include Transaction #1, #2x, and the modified #3 (called #3x).
Block 3X
Step 1: Determine the Hash Input String What is the previous hash?
What is the Transaction Format for Transaction #3X? (Note: this will be the same as Transaction #3)?

What is the hash input string?

Step 2: Determine the nonce
What nonce will work? Hint: nonce will be between “0000” and “0020”

Step 3: Record the results

Two Blockchain Versions. Which Do We Use? [Slide 49]
At this point, there are 2 versions of the blockchain:
Version 1

Version 2

Which version is used?
Remember that each node in the peer-to-peer network contains a copy of the blockchain. All of the nodes contain Version 1 except for the rogue node which contains Version 2.
As only one node contains the rogue transaction, a consensus will be reached by the network that the rogue node is invalid. The nodes in the network will therefore continue using Version 1.

Transaction #4 [Slides 50-51]
For Transactions 4 and 5, use the valid version (Version 1) of the blockchain that does not contain the rogue transactions.
The next day (6/21/2019), Sally buys another CB1 bar from John for $0.99

Date Time Buyer ID Seller ID Asset Amount Transaction Format
6/21/2019 12:00:00 001 002 CB1 0.99 06212019-12:00:00-001-
002-CB1-0.99

Step1: Determine the hash input string What is the previous hash?
What is the Transaction Format for Transaction #4?
What is the hash input string?

Step 2: Determine the nonce
What nonce will work? Hint: A valid nonce will be between “0020” and “0039”
What is the hash output string for the working nonce?

Step 3: Record the results

Transaction #5 [Slides 52-53]
Caroline likes the 0.99 price and buys a CB1 bar from John for $0.99 (same day 6/21/2019, two minutes later)

Date Time Buyer ID Seller ID Asset Amount Transaction Format
6/21/2019 12:02:00 003 002 CB1 0.99 06212019-12:02:00-003-002- CB1-0.99

Step1: Determine the hash input string What is the previous hash?
What is the Transaction Format for Transaction #5?
What is the hash input string?

Step 2: Determine the nonce
Hint: a working nonce will be between “0001 to “0019” What nonce will work?
What is the hash output string for the working nonce?

Step 3: Record the results

Part 3a: “Reflect” and “Think” about the Activity
[Slides 54-59]

1. Use the results from the exercise to fill in the table below. [Slides 55-56]
   Block #1 has been completed for you.

Block # Transaction List Previous Block Hash Current Hash Nonce
1 06182019-14:05:00-001-002-CB1-1.25 00000000 028848af 0002
2 06192019-12:05:00-001-002-CB1-1.29
3 06202019-11:30:00-001-002-CB1-2.99
4 06212019-12:00:00-001-002-CB1-0.99
5 06212019-12:02:00-003-002-CB1-0.99

2. Now complete the following table for the rogue blockchain [Slides 55-56]
   In the rogue blockchain, Transaction 2X alters the purchase price from 1.29 to 11.29. With this change, blocks 3-5 will also be affected.
   Note: You will have to hash block 4X and 5X on your own. Block 3X was completed earlier in this exercise.

Block # Transaction List Previous Block Hash Current Hash Nonce
1 06182019-14:05:00-001-002-CB1-1.25 00000000 028848af 0002
2X 06192019-12:05:00-001-002-CB1-11.29
3X 06202019-11:30:00-001-002-CB1-2.99
4X 06212019-12:00:00-001-002-CB1-0.99
5X 06212019-12:02:00-003-002-CB1-0.99

3. Read the below quotes and answer questions in the boxes provided. [Slides 57-59]
   The following in italics describe the blockchain associated with bitcoins from Wikipedia (Source: https://en.bitcoin.it/wiki/Block).
   As blocks are buried deeper and deeper into the blockchain they become harder and harder to change or remove, this gives rise of bitcoin’s Irreversible Transactions.

What aspects of the Chocolate Bar activity make it difficult to change a transaction?

Each block contains, among other things, the current time, a record of some or all recent transactions, and a reference to the block that came immediately before it. It also contains an answer to a difficult-to-solve mathematical puzzle – the answer to which is unique to each block.

Describe the difficult-to-solve mathematical puzzle in the Chocolate Bar activity. What term is used to describe the answer?

New blocks cannot be submitted to the network without the correct answer – the process of “mining” is essentially the process of competing to be the next to find the answer that “solves” the current block.

In the Chocolate Bar activity, we followed three basic steps: Step 1: Determine the hash string input
Step 2: Determine the nonce Step 3: Record the results

Which step is analogous to the “mining” process?

The mathematical problem in each block is extremely difficult to solve, but once a valid solution is found, it is very easy for the rest of the network to confirm that the solution is correct.

In the Chocolate Bar Activity, how was the difficulty level of the puzzle defined? How do you think the difficulty level could be increased?

In the Chocolate Bar Activity, how can the solution nonce be verified?

In our Chocolate Bar activity, the difficulty level was set by requiring a hash output of just one leading 0. It is a simplification to view the proof-of-work process as trying to guess a number with a specific number of leading zeros. The following is from Doncho Karaivanov:

The leading zeros

All the talk about the leading zeros comes from the fact that the target number is usually a very large number with a lot of leading zeros when represented in binary format. Since the number that miners need to find needs to be lower than or equal to the target number, it has equal or more zeros compared to it .…

Summary

The Bitcoin proof-of-work system is an extremely clever solution to securing a publicly-shared ledger of monetary transactions, while also creating incentives for miners to keep playing the guessing game.

Miners try to guess a random number that is lower than or equal to a target number set by the Bitcoin network. If they guess right, the block they created is appended to the blockchain and they begin work on the next one.

Every 2016 blocks, the target number is adjusted based on the time it took to create the previous 2016 blocks. If it took more than 2 weeks, the difficulty is lowered and vice versa. The goal is to always make it so new blocks are found, on average, every 10 minutes, no matter the combined hash power of all miners in the Bitcoin network.

And that’s it. That’s how Bitcoin’s proof-of-work consensus mechanism works. If we dive into the intricacies things get a bit more confusing and interesting, but in the simplest terms, the system is designed to secure Bitcoin’s blockchain from malicious actors.

Source: https://chainbulletin.com/proof-of-work-explained-in-simple-terms/

The above excerpt describes how Bitcoin’s blockchain is secured from “malicious actors.” Fill in the blanks on the explanation of how the Candy Bar Activity secures the list of transactions from “malicious actors.”

Word Bank: Some words may be used more than once.
Blockchain Current Block Hash Four
Hash input string Nonce Nodes
One Peer-to-Peer Previous Block Hash

In the Candy Bar activity, the transactions are stored in a data structure called a . Each block in the Candy Bar blockchain contains transaction. Each block in the blockchain contains the details on the transaction, the , the , and the . In this activity, the nonce contains

digits. The is combined with the transaction details and the to form the . The puzzle is solved once the input string produces a hash with leading zero. The first eight digits of the hash output becomes the and is also stored in the block. In this blockchain, it is difficult for a malicious actor to modify the transaction details. If any part of the transaction detail is modified, then the associated with the block will no longer produce a valid hash output (i.e. an output with
leading zero) and therefore the block will be rejected by the other in the network.

Do you feel more confident about blockchains now? Yes or No

Could you explain the blockchain processes now to someone else? Yes or No or Maybe How did this activity change your understanding of blockchains?

Part 3b: “Think” about Distributed Ledgers
[Slides 60-64]

1. Read the below article from tradix.com. [Slide 60]
   “The Difference Between Blockchain & Distributed Ledger Technology” Source: https://tradeix.com/distributed-ledger-
   technology/#:~:text=The%20most%20important%20difference%20to,not%20require%20such%20a%20c hain.&text=A%20distributed%20ledger%20is%20merely,sites%2C%20regions%2C%20or%20participants.
2. Answer the following questions based upon your reading. [Slide 61-64]
3. Are blockchains and distributed ledgers the same? Yes or No
4. What does DLT stand for?
5. According to the article, what is the definition of a distributed ledger?
6. DLT provides a verifiable and auditable history of all information stored on it. True or False
7. According to the article, Kleenex : facial tissue as : .
8. A blockchain is essentially a shared database filled with entries that must be confirmed and encrypted. True or False
9. The name blockchain refers to the “blocks” that get added to the chain of transaction records. To facilitate this, the technology uses cryptographic signatures called a .
10. Distributed ledgers require a blockchain structure. True or False
11. Distributed ledgers require proof-of-work. True or False
12. A distributed ledger is merely a type of
    participants.

spread across multiple sites, regions, or

11. All blockchains are distributed ledgers, but not all distributed ledgers are blockchains. True or False.
12. Blockchain technology offers a way to securely and efficiently create a tamper-proof log of sensitive activity. What are two examples from the article for blockchains use?
    (1):
    (2):
13. Blockchains are said to provide an immutable audit trail. This is supported in blockchains by having data stored in a place where no owns or controls it, and no one can what is already written.

Part 3b: “Think” about Distributed Ledgers

Part 3c: “Apply” Blockchains
[Slides 65-68]

In this part, you will explore additional implications of bitcoins and blockchains.

1. Hash your name to select a topic number. [Slide 66]
   In Part 1, what was the hash value of your first name concatenated with your last name?
   For example, a hash input string of “Maddie Jones” will produce an SHA-256 hash of:

Based on the hash of your name, going from left to right, identify the first digit between 1 and 5 to identify your topic number. In the example above, the first digit between 1 and 5 is a “2” so “Maddie Jones” would select topic 2 below.

2. Prepare a response to the assigned topic question. [Slide 67]
   Based on your topic number, prepare a short answer response to the question. Unless otherwise instructed, you only need to answer the question number associated with your hash.

Your response should be between 300 – 500 words. Provide the URL of any sites or documents used to answer the question. Post your response to the appropriate Discussion Board or as directed by your instructor.

Topic Number Question
1 What does the IRS think about bitcoins? What are the tax implications of bitcoins?
2 Do you think bitcoin or another cyber currency will replace existing traditional currency? Why or why not?
3 Besides bitcoins, what are some practical applications for blockchains? Why are blockchains appropriate in those scenarios? What companies have implemented blockchains and for what purpose?
4 How will blockchains impact audit?
5 How will blockchains impact tax?

Part 3c: “Apply” Blockchains

Part 4: “Apply” Assignment (Bonus)
[Slide 68]

Imagine Your Own Blockchain Accounting Scenario
In this part, you will build your own blockchain! It could be sales, accounts payable, accounts receivable, or a supply chain/WIP series of transactions.
Create your own firm, product, pricing, and reasons for an adjustment of the accounting records. Here you will apply what you learned in the Blockchain/Bitcoin Activity. As was shown in the example from the Blockchain/Bitcoin Activity, you are looking for the four-digit nonce that provides a hash beginning with ONE ZERO for the validation of each block.

Assumptions & Difficulty-Level Restriction
Simplifying Assumptions
• We will only be using the first 8 digits of the hash value in our blockchain
• Different fields within a transaction are delimited by a “-”
• We only have one transaction per block.

Difficulty-Level Restriction: Hash value results must start with one single leading “0”.
• For example, the hash value “0abc1234” would meet this restriction but the hash value “1234abc0” would not.

Your Scenario Details
Determine and record the following items for your blockchain scenario:
a) Your firm name and industry:

b) The asset and its price in dollars or bitcoins for the first block:

c) Seller and Purchaser names/ID numbers:

d) Describe the company background, scenario, and events in a few sentences:

e) To facilitate the creation of your blocks, fill in the following information for each transaction in Table 1.
Note: You may need more or fewer rows. Indicate rogue transactions using red font. For additional guidance, please look at the Activity (Part 2 document).

Description Date    Time    Buyer

ID Seller
ID Asset Amount Transaction Format
1
2
3
4
5
Table 1: Transactions
*Red font denotes rogue transaction
f) Fill in the first row of Table 3 with the appropriate genesis (i.e., first) block information. Remember the following as you complete Table 3:
• Remember that the appropriate information includes a correct four digit nonce and the first eight digits of the previous hash.
• Rogue transactions in both tables should be reported in red font.
Note: It may be helpful for you to work through Table 2 first. Using the hash calculator of your choice, try different nonce values until you arrive at a hash beginning with a single zero. This will be the first hash. Then repeat these steps for each subsequent block and complete Table 3.

Previous Hash   +   Current Transaction +   nonce

1
2
3
4
5
Table 2: Hash Input Strings for Each Transaction

Hash Input  Hash Output

1
2
3
4
5
Table 3: Hash Inputs and Outputs*
*Red font denotes rogue transaction

Suggested hash calculator: https://xorbin.com/tools/sha256-hash-calculator

Appendix: Summary Documents / Hints

Description Date    Time    Buyer ID    Seller ID   Asset   Amount  Transaction Format

1 Sally buys a CB1 bar from John for $1.25. 6/18/2019 14:05:00 001 002 CB1 1.25 06182019-14:05:00-001-002-CB1-1.25

2 The next day (6/19/2019), Sally buys another CB1 bar from John for $1.29
6/19/2019
12:05:00
001
002
CB1
1.29
06192019-12:05:00-001-002-CB1-1.29

2X The next day (6/19/2019), Sally buys another CB1 bar from John for $11.29
6/19/2019
12:05:00
001
002
CB1
11.29
06192019-12:05:00-001-002-CB1-11.29

3 The next day (6/20/2019), Sally buys another CB1 bar from John for $2.99
6/20/2019
11:30:00
001
002
CB1
2.99
06202019-11:30:00-001-002-CB1-2.99

4 Next day (6/21/2019), Sally buys another CB1 bar from John for
$0.99
6/21/2019
12:00:00
001
002
CB1
0.99
06212019-12:00:00-001-002-CB1-0.99

5 Caroline likes the 0.99 price and buys a CB1 bar from John for
$0.99 (same day 6/21/2019, two
minutes later)
6/21/2019
12:02:00
003
002
CB1
0.99
06212019-12:02:00-003-002-CB1-0.99
Table A.1 – Transaction Summary for Part 2

Transaction Hash Input
{8-Digit Previous Hash} + {Current Transaction} + {Nonce} Nonce Hint
1 00000000+06182019-14:05:00-001-002-CB1-1.25+xxxx Between 0000 to 0019
2 028848af+06192019-12:05:00-001-002-CB1-1.29+xxxx Between 0030 and 0050
2X 028848af+06192019-12:05:00-001-002-CB1-11.29+xxxx Between 0000 to 0019
3 0a1b1079+06202019-11:30:00-001-002-CB1-2.99+xxxx Between 0000 to 0019
3X 0b394db6+06202019-11:30:00-001-002-CB1-2.99+xxxx Between 0000 to 0019
4 03d0925a+06212019-12:00:00-001-002-CB1-0.99+xxxx Between 0020 and 0039
4X 01ebf7c3+06212019-12:00:00-001-002-CB1-0.99+xxxx Between 0000 to 0019
5 0714be74+06212019-12:02:00-003-002-CB1-0.99+xxxx Between 0000 to 0019
5X 0150a713+06212019-12:02:00-003-002-CB1-0.99+xxxx Between 0000 to 0019
Table A.2 – Hashing Cheat-Sheet for Transactions