Getting Started with Enterprise Blockchain

Chapter 5. A Blockchain Example: Commercial Paper

In Chapter 2, we referenced the Commercial Paper scenario provided as part of the Hyperledger Fabric samples repository. In this chapter, we will examine this scenario in depth as a tutorial to better understand what it is doing. We will then extend the tutorial to create a new transaction in the smart contract and develop a new command line application to invoke it.

What Is Commercial Paper?

The Commercial Paper tutorial simulates a simple commercial paper trading network called PaperNet. Commercial paper is a type of unsecured lending called a promissory note. Paper is normally issued by large corporations to raise funds to meet short-term financial obligations at a fixed rate of interest. Once issued at a fixed price for a fixed term, another company or bank will purchase commercial paper at a cost lower than its face value, and when the term is up, it will be redeemed for its face value.

As an example, if paper was issued at a face value of $10 million for a six-month term at 2% interest, then it could be bought for $9.8 million ($10 million – 2%) by another company or bank happy to bear the risk that the issuer will not default. Once the term is up, then the paper could be redeemed or sold back to the issuer for its full face value of $10 million. Between buying and redemption, the paper can be bought or sold multiple times between different parties on a commercial paper market.

Understanding the Commercial Paper Tutorial ...