McXD / BlockTEA

Triple entry accounting with blockchain

BlockTEA

• BlockTEA
  • Scenarios
  • Setting Up
    • Blockchains
      • Ethereum
      • Hyperledger Fabric
      • Corda
      • Explorers
    • Smart Contract Gateways
      • Hyperledger Fabric
      • Corda
    • Blockchain Event Listeners
    • Event Processors
    • React Client
    • AIS
  • Demo Flow
    • Create Related Accounts
    • Configure Accounting Settings
      • BlueTech Ltd.
      • GreenSolutions Inc.
    • Purchase Order
    • Asset Transfer
    • IOU
  • Work in Progress

This repo is a demonstration of BlockTEA (Blockchain-based Triple-Entry Accounting). It is a proof-of-concept that shows how blockchain can be integrated with Accounting Information Systems (AIS) to provide a more secure and transparent accounting system. This is the final year project of the author for BSc. Computer Science at The Hong Kong Polytechnic University.

Scenarios

This demo utilizes three blockchains: Ethereum, Hyperledger Fabric and Corda. It connects with two AIS: Odoo and QuickBooks. The following scenarios are implemented:

• Purchase Order
• Asset Transfer
• I-Owe-You (IOU)

Setting Up

Blockchains

Three blockchains are used in this demo: Ethereum, Hyperledger Fabric and Corda. Each of them has their own prerequisites and setup steps.

Ethereum

Make sure dependencies are installed: npm install.

cd etherum

## Start the local blockchain (:8545)
npx hardhat node

## In a new terminal, deploy the Purchase Order smart contract
## The contract address is deterministic so you don't have to modify the configuration
## Make sure you only deploy the contract once or else you will need to change the address
npx hardhat run scripts/deploy.js --network localhost

Hyperledger Fabric

Refer to the Hyperledger Fabric documentation for the prerequisites. You can also use the install-fabric.sh script to install them.

Two organizations will be created Org1 and Org2. In the demo, Org1 is the fictional company "BlueTech Ltd." and Org2 is "GreenSolutions Inc.".

cd fabric/test-network

## Bootstrap the network
./network.sh up createChannel

## Deploy the Asset Transfer chaincode
./network.sh deployCC -ccn asset-transfer-events -ccp ../chaincode/ -ccl javascript

Corda

Two parties will be created PartyA and PartyB. In the demo, PartyA represents "BlueTech Ltd." and PartyB represents "GreenSolutions Inc.".

cd corda

## Build the nodes and CorDapps
./gradlew deployNodes

## Start the nodes
build/nodes/runnodes

Explorers

The blockchains can be explored using the following explorers:

• BlockScout
• Hyperledger Explorer

Please refer to the official documentation for the setup steps. They can be linked to in the React client app (e.g., for viewing transaction details).

Smart Contract Gateways

Unlike Ethereum, Hyperledger Fabric and Corda do not have a standard API for smart contracts. Therefore, a gateway is required to interact with the smart contracts. The gateway is an HTTP API that exposes the smart contract functions.

Hyperledger Fabric

cd fabric/api

## Skip if already installed
npm install

## Start the gateway for Org1 (:3001)
node app.js

## Start the gateway for Org2 (:3002)
# node app.js Org2 // Not used in the demo

Corda

cd corda

## Start the gateway for PartyA (:10051)
./gradlew runPartyAServer

## Start the gateway for PartyB (:10052)
./gradlew runPartyBServer

Blockchain Event Listeners

In this demo, the two parties share the same set of listeners. The listeners will transform the event and send it to the message queue (on default ampq port 5672). Make sure you have a message broker running. The demo uses RabbitMQ.

cd ./listeners

# Ethereum
node ethereum/listen.js

# Hyperledger Fabric
cd fabric/listen.js
node listener.js

# Corda
# Listener is running together with the PartyA Gateway

Event Processors

The event processors will listen to the message queue and process the events. There are three pre-defined processors:

• odoo: account for the events in Odoo (for BlueTech Ltd.)
• quickbooks: account for the events in QuickBooks (for GreenSolutions Inc.)
• log: log the events to MongoDB

Make sure that you have configured the credentials in processor/config.js. Also make sure that you have MongoDB running (default port 27017).

```bash
cd processor

node odoo.js
node log.js
python3 quickbooks.py

React Client

The client is a React application that allows the user to interact with the system. In addition to the API gateways for smart contract, the client also connect to a few more backend services (e.g., proxy).

cd client

## Start the proxy services (:8081)
node server.js

## Start the web socket server (:8082)
node ws.js

## Start the client (:3000)
npm start

AIS

You can spin up your local Odoo instance and use the QuickBooks sandbox to for the demo. Remember to update the credentials in the code.

Demo Flow

Create Related Accounts

First, create the following accounts in Odoo and QuickBooks. The account names can be flexible just to distinguish them from the other system-generated accounts.

AIS	Account Name	Account Type	Description
Odoo	Ether	Asset	PO is settled in Ether
Odoo	Inventory (BlockTEA)	Asset	Inventory account for PO
Odoo	Accounts Payable (BlockTEA)	Liability	Accounts payable for PO
Odoo	Fabric Asset	Asset	Asset account for Fabric Asset Transfer
Odoo	Cash (BlockTEA)	Asset	Cash account for the demo
Odoo	Profit on Fabric Asset	Revenue	Revenue account for Fabric Asset Transfer
Odoo	Opening Balance (Fabric Asset)	Equity	Opening balance for Fabric Asset Transfer
Odoo	Loan Receivable (IOU)	Asset	Loan receivable for IOU
QuickBooks	Accounts Receivable (BlockTEA)	Asset	Accounts receivable for PO
QuickBooks	Revenue (BlockTEA)	Revenue	Revenue account for PO
QuickBooks	Ether	Asset	Purchase orders are settled in Ether
QuickBooks	Fabric Asset	Asset	Asset account for Fabric Asset Transfer
QuickBooks	Cash (BlockTEA)	Asset	Cash account for the demo
QuickBooks	Profit on Fabric Asset	Revenue	Revenue account for Fabric Asset Transfer
QuickBooks	Opening Balance (Fabric Asset)	Equity	Opening balance for Fabric Asset Transfer
QuickBooks	Loan Payable (IOU)	Liability	Loan payable for IOU

Configure Accounting Settings

BlueTech Ltd.

1. Go to the client app and click on the "Configuration" tab under "Accounting". Use the profile of "BlueTech Ltd." to configure the accounting settings.

2. Add the following configurations:

Event	Debit Account	Credit Account	Amount Field
OrderConfirmed	Inventory (BlockTEA)	Accounts Payable (BlockTEA)	totalAmount
InvoicePaid	Accounts Payable (BlockTEA)	Ether	amount
CreateAsset	Fabric Asset	Opening Balance (Fabric Asset)	appraisedValue
UpdateAsset	Profit on Fabric Asset	Fabric Asset	valueDifference
TransferAsset	Cash (BlockTEA)	Fabric Asset	appraisedValue
IssueIOU	Loan Receivable (IOU)	Cash (BlockTEA)	amount

GreenSolutions Inc.

1. Go to the client app and click on the "Configuration" tab under "Accounting". Use the profile of "GreenSolutions Inc." to configure the accounting settings.

2. Add the following configurations:

Event	Debit Account	Credit Account	Amount Field
OrderConfirmed	Accounts Receivable (BlockTEA)	Revenue (BlockTEA)	totalAmount
InvoicePaid	Revenue (BlockTEA)	Ether	amount
TransferAsset	Fabric Asset	Cash (BlockTEA)	appraisedValue
IssueIOU	Cash (BlockTEA)	Loan Payable (IOU)	amount

Purchase Order

1. Go to the client app and click on the "Purchase Order" tab. Use the profile of "BlueTech Ltd." to create a purchase order for "GreenSolutions Inc.". By default, the addresses for BlueTech is 0xf39Fd6e51aad88F6F4ce6aB8827279cffFb92266 and 0x70997970C51812dc3A010C7d01b50e0d17dc79C8 for GreenSolutions.

2. A NewOrder event will be emitted. And you can check this in the "Event Stream" tab. Since we didn't configure the accounting for this event, nothing will be recorded in the AIS.

3. Use the profile of "GreenSolutions Inc." to confirm the purchase order. A OrderConfirmed event will be emitted. The accounting settings will be used to record the event in the AIS. Go to the AIS for both companies to check it. A link is provided under the "Accounting" tab.

4. Use the profile of "GreenSolutions Inc." to create an invoice for the purchase order. A InvoiceCreated event will be emitted. Since we didn't configure the accounting for this event, nothing will be recorded in the AIS.

5. Use the profile of "BlueTech Ltd." to pay the invoice. A InvoicePaid event will be emitted. The accounting settings will be used to record the event in the AIS. Go to the AIS for both companies to check it. A link is provided under the "Accounting" tab.

Asset Transfer

1. Go to the client app and click on the "Asset Transfer" tab. Use the profile of "BlueTech Ltd." to create an asset transfer for "GreenSolutions Inc.".

2. A CreateAsset event will be emitted. BlueTech will record the asset in the AIS. GreenSolutions will not since it is not configured.

3. Trigger the transfer by clicking on the transfer action of the newly created asset. A TransferAsset event will be emitted. Both parties will account for this event as configured.

IOU

1. Go to the client app and click on the "IOU" tab. Use the profile of "BlueTech Ltd." to create an IOU for "GreenSolutions Inc.".

2. An IssueIOU event will be emitted. Both parties will account for the event.

3. Use the profile of "GreenSolutions Inc." to pay the IOU. A Settle event will be emitted. Both parties will account for the event.

Work in Progress

Handle other events and allow more complex configurations.