ABSTRACT V 1.0 2018.03.27 BGX Blue Paper, v 3.0 Breaking Down of the BGX Platform Technology BGX_BLUEPAPER_3.0 0 ABSTRACT V 3.0 2019.01.09 ABSTRACT This document describes the technological understanding of the BGX Platform, the integrative distributed ledger for a new generation of business networks. The first open- source distributed ledger focusing on digital assets, BGX provides a seamless and easy integration between businesses – using decentralization to construct shared economic mini-ecosystems. The core differentiators of the transformative BGX distributed network is the hierar- chal topology of nodes, the ability to exchange digital assets in reloadable transactions, not just currency, the anchoring of the system, its unique API capabilities, and the dual token system. Among particular importance is the F-BFT Consensus that enables the hierarchal topology, as well as unlimited horizontal and vertical scalability of the network’s through- put. The data processed by the network is placed in a special structure of the DAG (Di- rected Acyclic Graph) instead of blocks; it has the ability to grow in several directions simultaneously, unlike a blockchain. The main theses of the presented model: • Commitment to open and decentralized solutions that allow the use of tech- nology for the benefit of society, aimed at safety and free use; • The main technological solutions essentially depend on the business model and the customer value proposition, the technology and architecture should be maximally harmonized with business priorities; • There is no universal panacea for building the architecture of a modern dis- tributed technological system; to build sustainable solutions, it is necessary to find a compromise between scaling, security, decentralization and the cost of the solution; • The blockchain revolution continues, in addition to popular first-generation networks such as Ethereum and Blockchain, advanced solutions such as IOTA, HASHGRAPH / HEDERA and STELLAR appear. The computational model of new solutions must be based on rigorous mathematical concepts and use provable approaches. The BGX NetworkBGX_BLUEPAPER_3.0 1 CONTENT V 1.0 2018.03.27 CONTENT ABSTRACT ......................................................................................................................................... 1 CONTENT .......................................................................................................................................... 2 1 INTRODUCTION ......................................................................................................................... 4 1.1 BGX Project Scope ............................................................................................................. 4 1.2 BGX Group Innovation Approach ...................................................................................... 4 1.3 Blockchain 3.0 ................................................................................................................... 5 1.4 The BGX Platform .............................................................................................................. 7 1.4.1 The BGX function ......................................................................................................... 7 1.4.2 Platform tokenization .................................................................................................. 8 1.4.3 Usage scenarios ........................................................................................................... 9 1.4.4 Content of the platform ............................................................................................. 12 1.5 Outlook on the blockchain market of 2019 .................................................................... 13 2 TRANSACTIONAL SUB-SYSTEM ................................................................................................ 13 2.1 Payment Process ............................................................................................................. 13 2.1.1 BGX Platform as a Payment System........................................................................... 13 2.1.2 Stable coin approach ................................................................................................. 15 2.1.3 Payment scenarios ........................................................ 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Bookmark not defined. 2.1.4 Life cycle of the transaction ....................................................................................... 15 2.2 Prerequisites for the formation of a consensus protocol ............................................... 18 2.2.1 Bitcoin Blockchain and its mechanisms for protection .............................................. 18 2.2.2 The Byzantine Generals Problem ............................................................................... 19 2.2.3 Implementation of the consensus mechanism .......................................................... 19 2.2.4 Scalability attempts ................................................................................................... 21 2.2.5 Consensus models in distributed systems ................................................................. 22 2.2.6 Approach of BGX Processing ...................................................................................... 25 2.3 BGX Payment Protocol .................................................................................................... 29 2.3.1 Internal and External Processing ............................................................................... 29 2.3.2 Transaction Structure ................................................................................................ 29 2.3.3 Hashing and Signing of Transaction ........................................................................... 30 2.3.4 Validation and verification of transactions ................................................................ 30 2.3.5 The Base Layer ........................................................................................................... 30 2.3.6 Algorithm protection ................................................................................................. 31 BGX_BLUEPAPER_3.0 2 CONTENT V 3.0 2019.01.09 3 ARTIFICIAL INTELLIGENCE ....................................................................................................... 32 3.1 Machine Learning Approach ........................................................................................... 32 3.2 BGX Fraud Detection Math Model .................................................................................. 34 3.2.1 Model Inception ......................................................................................................... 34 3.2.2 Fuzzy Neural Network ................................................................................................ 36 3.2.3 The Resume ............................................................................................................... 39 4 PLATFORM ARCHITECTURE ..................................................................................................... 40 4.1 Design Approach ............................................................................................................. 40 4.1.1 Architecture as a Policy .............................................................................................. 40 4.1.2 Business Process Overview ........................................................................................ 42 4.1.3 Referencearchitecture ............................................................................................... 44 4.1.4 Stakeholders and Actors ............................................................................................ 48 4.1.5 Assumptions ............................................................................................................... 49 4.2 BGX Network ................................................................................................................... 49 4.2.1 BGX Node ................................................................................................................... 49 4.2.2 Node Interactions ...................................................................................................... 51 4.2.3 Transaction Verification ............................................................................................. 53 4.2.4 Node Authorization Channel ..................................................................................... 54 4.3 User privacy..................................................................................................................... 55 4.4 Interoperability ............................................................................................................... 56 APPLICATION 1: CONSENSUS TYPE ............................................................................................... 58 APPLICATION 2: DISTRIBUTED TRANSACTION SYTEMS ATTACKS .................................................. 60 APPLICATION 3: DECENTRALIZATION PLATFORM DESIGN DESCISION .......................................... 61 APPLICATION 4 KEY TERMS ............................................................................................................ 61 The BGX NetworkBGX_BLUEPAPER_3.0 3 INTRODUCTION V 3.0 2019.01.09 1 INTRODUCTION 1.1 BGX Project Scope BGX is a decentralized solution that eliminates intermediaries and excess costs, while allowing businesses to easily attract new partners. BGX is irreplaceable