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How Ethereum Works Medium

How Does Ethereum Work? Michele D'aliessi Medium

How Does Ethereum Work? Michele D'aliessi Medium

The logic and mechanics behind Ethereum explained in simple words. Ethereum is a platform on which anyone can build unstoppable, decentralised applications. If you have never heard of Ethereum or if you dont know what it can be used for, I would strongly recommend to read What is Ethereum? before digging deeper and exploring how it works in this article. The ultimate guide to understand Ethereum in simple words.medium.com The purpose of this article is to explain how Ethereum works by providing a general and non-technical overview of its logic and inner mechanics. Please keep in mind that what is described below is a simplified version of what actually happens, but it should be technical enough to give you a general understanding of how it works. Should you have any questions please write them as comments or private notes, it would help me refine this article over time and make it much clearer for future readers. We can see Ethereum as a stack of few layers built on top of each other. The first, basic layer that makes everything else possible is a large network of computers that process transactions and keep a shared database updated over time (the Ethereum blockchain). The second, is the software layer that allows developers to run programs called smart contracts on the Ethereum blockchain, using a programming language called Solidity . The third layer is made of applications that offer different services (from governance to identity management) to Ethereum users. The remarkable feature of this platform is that by leveraging the Ethereum hardware and software layers these applications are decentralised, lack a central point of failure and are somehow unstoppable. You just cant switch them off. Lets explore each of these layers in detail. Fig. 1 - The different layers Continue reading >>

Ethereum - Wikipedia

Ethereum - Wikipedia

This article has multiple issues. Please help improve it or discuss these issues on the talk page . This article relies too much on references to primary sources . Please improve this by adding secondary or tertiary sources . Some of this article's listed sources may not be reliable . Please help this article by looking for better, more reliable sources. Unreliable citations may be challenged or deleted. The Ethereum Project's logo, first used in 2014 Ethereum is an open-source , public, blockchain -based distributed computing platform featuring smart contract (scripting) functionality. [2] It provides a decentralized Turing-complete virtual machine , the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. Ethereum also provides a cryptocurrency token called "ether", which can be transferred between accounts and used to compensate participant nodes for computations performed. [3] "Gas", an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network. [2] [4] Ethereum was proposed in late 2013 by Vitalik Buterin , a cryptocurrency researcher and programmer. Development was funded by an online crowdsale between July and August 2014. [5] The system went live on 30 July 2015, with 11.9 million coins "premined" for the crowdsale. [6] This accounts for approximately 13 percent of the total circulating supply. In 2016, as a result of the collapse of The DAO project, Ethereum was forked into two separate blockchains - the new forked version became Ethereum (ETH), and the original continued as Ethereum Classic (ETC). [7] [8] [9] Ethereum was initially described in a white paper by Vitalik Buterin , [10] a programmer involved with Bitcoin Magazine , in late 2013 with a goal of buildin Continue reading >>

A Beginners Guide Toethereum

A Beginners Guide Toethereum

According to the Ethereum website , Ethereum is a decentralized platform that runs smart contracts. This is an accurate summary but in my experience when first explaining Ethereum to friends, family, and strangers it helps to compare Ethereum to Bitcoin since a lot of people have at least heard about Bitcoin before. This beginners guide should help those who are new to Ethereum to understand the high level differences between the two. Simply put, Bitcoin can be described as digital money. Bitcoin has been around for eight years and is used to transfer money from one person to another. It is commonly used as a store of value and has been a critical way for the public to understand the concept of a decentralized digital currency. Ethereum is different than Bitcoin in that it allows for smart contracts which can be described as highly programmable digital money. Imagine automatically sending money from one person to another but only when a certain set of conditions are met. For example an individual wants to purchase a home from another person. Traditionally there are multiple third parties involved in the exchange including lawyers and escrow agents which makes the process unnecessarily slow and expensive. With Ethereum, a piece of code could automatically transfer the home ownership to the buyer and the funds to the seller after a deal is agreed upon without needing a third party to execute on their behalf. The potential for this is incredible! Think of the numerous applications that act as a third party to connect you with others based on some set logic (e.g. Uber, Airbnb, eBay). Many of the centralized systems we use today could be built in a decentralized manner on Ethereum. With Ethereum you can make these transactions trustless which opens up an entire world of dec Continue reading >>

What Does It Mean To Issue A Token On Top Of Ethereum?

What Does It Mean To Issue A Token On Top Of Ethereum?

What does it mean to issue a token on top of Ethereum? Understanding how Ethereum-based tokens work and their relationship to Ether. Even for those with an understanding of cryptocurrencies, Ethereum and other advanced open blockchain networks can be confusing, especially when people start talking about launching their new cryptocurrency or token on top of Ethereum. How can one valuable digital item run or be launched on top of another valuable digital item? This backgrounder will answer that question, but first we need to cover a fair amount of background material. Much of the confusion stems from the cryptocurrency communitys unfortunate habit of using the same name to describe multiple different things; so, to start, well try to disambiguate a few terms. Bitcoin is a peer-to-peer network. Bitcoin is a computer protocol for electronic cash. Bitcoin is a provably scarce token that will have a positive value if there is demand for it. All of these are true statements, which means that Bitcoin, the word, is used to describe three different things: (1) a group of networked computers on the Internet, (2) a set of rules and procedures for passing data between computers, and (3) valuable tokens that exist as a consequence of these networked computers running that Bitcoin protocol software. Those valuable tokens, bitcoins, in turn perform at least three functions: (1) people who dedicate computing resources to making the network work (i.e. miners) are rewarded with bitcoins, (2) users of the network can send bitcoins to other users as a payment medium, and (3) users can (and often must) pay fees in bitcoin in order to use the network. Many people interested in open blockchain networks started with Bitcoin and never had this distinction entirely spelled-out for them. So, when Continue reading >>

Understanding Ethereum, Bitcoins Virtual Cousin

Understanding Ethereum, Bitcoins Virtual Cousin

Technology |Understanding Ethereum, Bitcoins Virtual Cousin Vitalik Buterin was a fan of Bitcoin before he created the Ethereum network and its virtual currency, Ether. Credit Steve Jennings/Getty Images Bitcoin has many cousins and competitors. None have grown more popular than Ethereum, a global computer network with its own virtual currency, called Ether. Ethereum is a global computing network operating according to rules defined by Ethereum software. Those rules allow the Ethereum network to be programmed to complete certain types of computing tasks, with every computer on the network completing the task in parallel to ensure it is done correctly. Generally the tasks involve money. The creator of Ethereum, Vitalik Buterin, has likened it to a global smartphone that can be programmed to operate according to the apps built on top of it. The apps are called Dapps because they are run by a decentralized network of computers. Mr. Buterin says he chose the name because it refers to the hypothetical invisible medium that permeates the universe and allows light to travel. He announced Ethereum in late 2013, but it didnt go into operation until 2015. The Ethereum network has its own virtual currency, Ether. In the simplest sense, Ether are needed to pay the other computers on the network to complete tasks. It isnt free to use the network. People have also decided to buy and hold Ether, betting that it will become more valuable as more people want to use the network and need Ether to pay for the networks computing power. What does Ethereum have to do with Bitcoin? Mr. Buterin was a Bitcoin aficionado, and he was inspired by its success. But he set out to build something that could do more than Bitcoin: He wanted to build a system that would make it possible to program more c Continue reading >>

Crypto Canon Andreessen Horowitz

Crypto Canon Andreessen Horowitz

by Sonal Chokshi , Chris Dixon , Denis Nazarov , Jesse Walden , and Ali Yahya Heres a list building on and including Chris last roundup of crypto readings and resources. Its organized frombuilding blocks and basics; foundations (& history); andkey concepts followed by specific topics such asgovernance; privacy and security; scaling; consensus; cryptoeconomics and investing; fundraising and token distribution; decentralized exchanges; stablecoins; and cryptoeconomic primitives (crytocollectibles, curation markets, games). We also included a section with developer tutorials, practical guides, and maker stories as well as other resources, such as newsletters and courses, at the end. Well soon be updating this regularly at crypto.a16z.com, for now well keep it updated here. You can also find most of a16zs writings, posts, and videos on the topic at a16z.com/crypto. WTF is the blockchain? understanding the problem it solves before defining it Ever wonder how bitcoin (and other cryptocurrencies) actually work? What are cryptonetworks and why are tokens fundamental? with full deck Why its hard to get bitcoin: the blockchain spectrum Money, blockchains, and social scalability What do we mean by blockchains are trustless? Why decentralization matters from eras of the internet to cryptonetworks The meaning of decentralization but what does that actually mean? nuances, depth Quantifying decentralization we must be able to measure blockchain decentralization before we can improve it The truth about blockchain framework for adoption to helpbig company executives understand state of development; strategic investments; challenges, resources, processes to facilitate adoption Vitalik Buterin, creator of Ethereum Unchained: big ideas from the worlds of blockchain and cryptocurrency The Continue reading >>

Ethereum: Everything You Want To Know Aboutgas

Ethereum: Everything You Want To Know Aboutgas

Gas keeps Ethereum Blockchain alive, thanks to it we can transfer Ether and other Ethereum tokens such as: GameCredits (GAME), OmiseGo (OMG) or Golem (GNT), it also allows to smart contracts to do their job. In this blogpost Im going to explain: what is Gas? how is it used? and why is it so important for the future of Ethereum? Important: Dont be misled by the Token named GAS which is something completely different. Ethereum blockchain is run by nodes that keep the blockchain state but also calculate new blocks. New blocks are needed to change Blockchains state e.g. move Ethereum from one account to another. Calculation of the new block is made by miners, to cover their effort transaction sender must pay a fee. Transaction fee depends on complexity of transaction sender wants to make, if its a regular send Ether transaction or more complex one like create smart contract (smart contract a special kind of the blockchain account, that can not only keep Ether but also computer program with its state). Sending Ether from one account to the other costs 21,000 Gas. On the other hand creating smart contract which is responsible for handling OmiseGo Token costed 1,197,977 Gas. So the more complex transaction, the more Gas we need to pay for its execution on Blockchain. Main complexity factors are: operations performed by the smart contracts code e.g. arithmetical operations data that is stored on blockchain e.g. storing information in the smart contract or updating an amount of Ether on the account We know more or less what Gas is, but how much does it cost? The answer is as always it depends. Each transaction sender (e.g. person who is sending Ether) is defining price of Gas for created transaction (e.g. 1 Gas = 0.000000001 ETH). If the price is high enough, transaction will b Continue reading >>

The Mystery Behind Blocktime

The Mystery Behind Blocktime

Identity Evangelist, Author, Blogger, Developer, Blockchain Enthusiast, Senior Director of Security Architecture at WSO2, Apache WS Committer, Axis PMC Member Block time defines the time it takes to mine a block. Both in bitcoin blockchain and ethereum blockchain, there is an expected block time, and an average block time. In bitcoin, the expected block time is 10 minutes, while in ethereum it is between 10 to 19 seconds. Both bitcoin and ethereum, at the time of this writing use a proof of work based distributed consensus algorithm (ethereum is planned to move to a proof of stake based algorithm with its serenity release). The expected block time is set at a constant value to make sure, miners cannot impact the security of the network by adding more computational power. The average block time of the network is evaluated after n number of blocks, and if it is great than the expected block time, then the difficulty level of the proof of work algorithm will be reduced, and if it is less than the expected block time then the difficulty level will be increased. Thats the core design principle behind block time, but you will see as we proceed, how bitcoin and ethereum differentiate themselves from each other. The level of difficulty varies with the time, as per the following formula. It tries to evaluate the speed of the mining network and find out how much it deviates from the expected level. The expectation is to mine a block in 10 minutes. For example, if the average speed of mining the last 2016 blocks is 8 minutes then the new difficulty factor will be greater than one, so the current difficulty level will be increased. In case the average is above 10 minutes, then the factor will be less than 1 and the difficulty level will be decreased for the next 2016 blocks. The d Continue reading >>

Ethereum, Ether And The Blockchain Ecosystem!

Ethereum, Ether And The Blockchain Ecosystem!

Blockchain is a new way of digital communication and transaction where everyone is powerful, and accountable, thus giving birth to the powerful democratic ecosystem for humans to thrive. This NoTrust System is really trustworthy and a new decentralized internet for the masses to go mainstream. A group of people known by pseudonym Satoshi Nakamato gave this world a truly game changing technology, which now the world knows by the name The Blockchain: A chain of decentralized public ledger or database blocks. A Blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as completed blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central recordkeeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically. Don & Alex Tapscott, authors Blockchain Revolution (2016) says: The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything ofvalue. This brilliant innovation has powered many blockchain system like bitcoin, litecoin, NEO, Ripple and many more digital currency. Today we will cover in detail about Ethreuem: A Comprehensive Blockhain Ecosystem which is empowering many blokchain powered innovative idea to capture the imagination of ingenious minds and the world as a whole. We will uncover our journey in the following phases: How To Invest in Ethereum & Market Stats? As an open blockchain platform that lets anyone build and use decentralized applications that run on blockchain technology. Like Bitcoin, no one controls or owns Ethereum it Continue reading >>

Ethereum Devcon3 Summary: Day1

Ethereum Devcon3 Summary: Day1

Spacetime coordinates: Nov 1st, 2017. Cancun, Mexico Jump to Summary: Day 1 . Day 2 . Day 3 . Day 4 . Great talks including Casper for Proof of Stake, Plasma and Sharding for scalability and zkSNARKs for keeping sensitive data off the public blockchain. Vitalik starting off the day with a refresher on how Ethereum works. Wont go into detail as that info is covered elsewhere. Martin Becze Deterministic Parallel Message Processing A discussion on approaches to parallel processing for Ethereum transactions. Martin discussed using the Actor model (think Akka) with parent and child smart contracts to achieve information hiding and better encapsulation with smart contracts. Robert Habermeier Presenting Parity: a Light client for a HeavyChain Robert discussed 3 different types of Ethereum clients below. Discussed the idea that Light Clients and Thin Clients are trusting Full Nodes. Also discussed the idea for block pruning that is, limiting the total amount of blocks a Full Node needs to store, and potentially just having individual nodes responsible for a sequence of ~1000 blocks. I proposed to Robert using Cassandra-style consistent hash rings for scalable storage of blockchain data. Full Node downloads all block headers and bodies, runs through consensus algorithms, verifies all transactions Light Client Just verifies block headers, but not transactions Thin Client Verifies block headers, but does not validate state transitions. Entertaining talk from Yoichi on the voting mechanisms proposed for Casper, the Proof of Stake proposal for Ethereum. Main takeaways were there are several rules for voting, including no duplicate votes by the same entity within the same block, no contracting ones own vote, and no surrounding a vote by specifying an ancestor block the predates ones Continue reading >>

What Is Ethereum? A Step-by-step Beginners Guide

What Is Ethereum? A Step-by-step Beginners Guide

If you want to know what is Ethereum and how it works and what it can be used for, without going deep into the technical abyss, this guide is perfect for you. Important Note: This guide assumes a basic understanding of blockchain technology. If youre unfamiliar with blockchain, check out this step by step introduction for beginners . Beyond Bitcoin & first generation decentralized applications Although commonly associated with Bitcoin , blockchain technology has many other applications that go way beyond digital currencies. In fact, Bitcoin is only one of several hundred applications that use blockchain technology today. [Blockchain] is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one. Sally Davies, FT Technology Reporter Until relatively recently, building blockchain applications has required a complex background in coding, cryptography, mathematics as well as significant resources. But times have changed. Previously unimagined applications, from electronic voting & digitally recorded property assets to regulatory compliance & trading are now actively being developed and deployed faster than ever before. By providing developers with the tools to build decentralized applications, Ethereum is making all of this possible. At its simplest, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications. Is Ethereum similar to Bitcoin? Well, sort of, but not really. Like Bitcoin , Ethereum is a distributed public blockchain network. Although there are some significant technical differences between the two, the most important distinction to note is that Bitcoin and Ethereum differ substantially in purpose and capabil Continue reading >>

React & Ethereum: Getting Started With The Minimum Toolset Requiredpart 1 Of4

React & Ethereum: Getting Started With The Minimum Toolset Requiredpart 1 Of4

Blockchain Engineer - Ethereum <> React. Context dependent being. Enjoyer of essences. React & Ethereum: Getting Started With The Minimum Toolset Required Part 1 of4 Learn how to create a smart contract and deploy it to the Ethereum blockchain, using the minimum toolset required: Remix, Metamask, and any text editor. Pixabay image, released under Creative CommonsCC0 . The essence of this post is to show how React can talk with the Ethereum blockchain. Only three tools will be used, so therell be a minimum learning curve. The project will be broken down into five phases so it can be easily followed. Intended audience: Students / beginners / intermediate beginners, and anyone with curiosity. Prerequisites: Basic familiarity with JavaScript, React, npm, and the command line. Simple knowledge of ether and gas. Solidity will be used to write our smart contract , though familiarity with it is not needed. Ill do my best to explain whats happening, and Ill link relevant key words to the Solidity documentation for easy reference. Design note: Im designing this post to be a learning experience which aims to deliver a simple and detailed understanding of the toolset used and the Solidity programming language. Practicing, recalling from memory, and following processes are part of this experience. GitHub repository : If youd like, you can code along with my repository. Ive added comments as a guide. Personal process note: I would like to mention that even though these posts appear linear, my process of learning and coding this example was far from it. It was non-linear, a bit like a spiral or a helix. I applied a rapid-prototyping / rapid-iteration process that I learned while attending Stanford University, one where I tried something small, debugged it, tried again, debugged again Continue reading >>

The Hitchhikers Guide To Smart Contracts Inethereum

The Hitchhikers Guide To Smart Contracts Inethereum

The Hitchhikers Guide to Smart Contracts inEthereum Updated Oct 6th 2017, for Truffle v3.4.11 and Solidity v0.4.15. Ive been working with smart contracts for 4 years , mainly in the Bitcoin blockchain. Some projects I participated in are Proof of Existence , bitcore , and Streamium . In the past months, Ive been exploring and working with the Ethereum platform. Ive decided to compile a short guide to ease the way of future programmers learning Ethereum smart contract development. Ive divided the guide in two sections: how to get started building smart contracts in Ethereum, and a quick note on smart contract security. Getting started with Smart Contracts onEthereum This guide assumes you have a basic level of technical understanding on how cryptocurrencies and blockchains work. If you dont, I recommend skimming over Andreas Antonopoulos Mastering Bitcoin book , Consensys Just Enough Bitcoin for Ethereum guide , or at least watching this short video by Scott Driscoll . To continue ahead you should know what a public and private key are, why a blockchain needs miners, how decentralized consensus is reached, what a transaction is, and the concepts of transaction scripting and smart contracts. Two other important and related concepts youll need to understand before working with Ethereum are the Ethereum Virtual Machine and gas. Ethereum was designed as a smart contract platform. Its origin is actually linked to a critique made by Vitalik Buterin on bitcoin as a very limited smart contract platform. The Ethereum Virtual Machine (EVM) is where smart contracts run in Ethereum. It provides a more expressive and complete language than bitcoin for scripting. In fact, it is a Turing Complete programming language. A good metaphor is that the EVM is a distributed global computer wh Continue reading >>

From What Is Blockchain? To Building A Blockchain In Less Than Anhour

From What Is Blockchain? To Building A Blockchain In Less Than Anhour

Investor, writer, and emerging tech enthusiast | www.lstephanian.com From What is Blockchain? to building a blockchain in less than anhour A blockchain is a digital ledger of records thats arranged in chunks of data called blocks. These blocks then link with one another through a cryptographic validation known as a hashing function . Linked together, these blocks form an unbroken chain a blockchain. The reason that this type of data structure is useful for things like cryptocurrencies is decentralization, meaning the records inside this chain arent stored in any single location, are accessible by everyone, and are immutable by any one party. Centralized Structure Vs. Decentralized Structure, Source: SoftwareAdvice Although blockchain is most commonly associated with Bitcoin, there are many uses for this technology. There are several broad categories of blockchain applications, a couple of which include: The Blockchain that makes up Bitcoin sends money globally to individuals and merchants. But Blockchains can also create digital assets like stocks and bonds. A Blockchain can create a verifiable record of any data, file, or contract. This can be useful in any industry that uses big data, like the medical industry or government. Before you begin, I should note that this article assumes you have a basic understanding of programming and some understanding of computer science theory. This article isnt meant to be all-encompassing, but rather to serve as an introduction to blockchain programming for those looking to expand their technical knowledge. I believe that the best way to truly understand a concept is to put it into practice. If you are interested in learning how to implement a blockchain contract, Ive put together an easy-to-follow, step-by-step tutorial below. You Continue reading >>

How Wetrust Works Under The Hood Part1

How Wetrust Works Under The Hood Part1

This is the first of a four part series describing in detail how the WeTrust distributed App (dApp) works! WeTrust is a collaborative insurance and savings platform on the blockchain. It was created to enable groups of people to create their own savings and insurance blockchain organizations on the blockchain. These organizations, known as Trusted Lending Circles and as Rotating Savings and Credit Associations (ROSCAs), have been used in many parts of the world, providing financial services to people who do not have access to traditional financial institutions. But how does the WeTrust platform actually make this Trusted Lending Circle magic happen? The WeTrust Trusted Lending Circle dApp is composed of the smart contracts which implement the rules of a Trusted Lending Circle, an optional WeTrust frontend that simplifies the creation of and participation in Trusted Lending Circle contracts, and a WeTrust backend that makes checking the status of a Trusted Lending Circle more efficient. Lets explore the different parts in more detail. The WeTrust Trusted Lending Circle Smart Contract The most important part of the WeTrust dApp is the smart contract which implements the rules of a Trusted Lending Circle. The contract is written in Solidity, an object oriented programming language developed specifically for writing contracts on the Ethereum network. When contracts are deployed to the Ethereum blockchain, they are given a unique address, which consists of a bunch of hexadecimal characters. Within each contract, function declarations implement the defining rules of the smart contract. Solidity also provides language constructs specifically targeted at logging on the blockchain, such as the event primitive and the indexed keyword. A Solidity program is eventually compiled in Continue reading >>

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