Add section on determinism

Author: Nicholas Clarke

src/ledger/concepts/blocks.md

@@ -40,6 +40,8 @@ The full details and implications of this split are covered in
 For now, we can assume that the contents of the header are not important for
 the ledger processing.
 
+## The block body
+
 The block body itself is split into four parts. This division is not conceptually
 necessary but is helpful for efficient processing:
 

src/ledger/concepts/determinism.md

@@ -0,0 +1,42 @@
+# Determinism
+
+An important principle that occurs in a few places throughout the Cardano ledger
+is that of determinism. Perhaps one way to summarise is would be to say: "the
+transaction is all you need" - that is, when trying to compute the results of
+a transaction, you need only look at the transaction itself rather than
+computing with the full ledger state.
+
+There are two important instantiations of this principle:
+
+## Transaction Determinism
+
+This instance tells us that, given a transaction is valid, its outputs are
+determined fully by the transaction itself. It may be necessary to look at
+certain parts of the ledger state to determine whether it is valid - for
+example, to check that the inputs have not been spent - but assuming it is
+valid, the outputs created will be exactly as described in the transaction.
+
+## Script determinism
+
+This instance tells us that, assuming a transaction passes phase 1 validation,
+the validity of a script is determined only by data contained in the transaction
+and in the transaction outputs that it spends or references.
+
+## Implications for Node Implementors
+
+These properties allow node implementors to safely make certain assumptions
+which can speed up transaction and block processing.
+
+1. When processing historical blocks, nodes need only consider (or even
+   deserialise) [transaction bodies](./blocks.md), since the rest of the
+   block payload can only impact the block _validity_, which is already known
+   for historical blocks.
+2. Many of the more expensive checks of transaction validity need only be
+   carried out once. In particular, the cryptographic verification and script
+   execution need only be carried out once, when the transaction first enters
+   the mempool. Subsequently it is required only to check that the inputs still
+   exist.
+
+To take advantage of these properties, ledger implementers must distinguish
+between these checks in the ledger in such a way as to allow transactions to be
+(re-)processed without repeating expensive computation.