Accounts, Transactions, Gas, And Block Gas Limits In Ethereum
Accounts, Transactions, Gas, and Block Gas Limits in Ethereum This article is meant to help people understand some of the basic mechanics behind accounts, transactions, gas, and the role miners play in setting the block size in Ethereum. Corrections are welcome :) There are two types of accounts in Ethereum can send transactions (ether transfer or trigger contract code), code execution is triggered by transactions or messages (calls) received from other contracts. when executed - perform operations of arbitrary complexity (Turing completeness) - manipulate its own persistent storage, i.e. can have its own permanent state - can call other contracts All action on the Ethereum block chain is set in motion by transactions fired from accounts. Every time a contract account receives a transaction, its code is executed as instructed by the input parameters sent as part of the transaction. The contract code is executed by the Ethereum Virtual Machine on each node participating in the network as part of their verification of new blocks. The term transaction is used in Ethereum to refer to the signed data package that stores a message to be sent from an externally owned account to another account on the blockchain. a signature identifying the sender and proving their intention to send the message via the blockchain to the recipient, VALUE field - The amount of wei to transfer from the sender to the recipient, an optional data field, which can contain the message sent to a contract, a GASLIMIT value, representing the maximum number of computational steps the transaction execution is allowed to take, a GASPRICE value, representing the fee the sender is willing to pay for gas. One unit of gas corresponds to the execution of one atomic instruction, i.e. a computational step. Contrac Continue reading >>
Orphan, Uncle & Genesis Blocks Explained
There are many different types of blocks in the cryptocurrency and blockchain technology space, but few people actually understand what they mean. This article is going to highlight and explain the different types of blocks in the cryptocurrency space that you definitely NEED to know. Orphan blocks are commonly associated with Bitcoin . They are valid blocks that meet all the necessary requirements needed to be added to the blockchain , but are however still rejected. Orphan blocks occur when two miners produce a block at similar times. This happens because the acceptance of a block into the blockchain by the nodes on a network does not happen instantaneously, therefore, another miner can in practise, solve for the same exact block. This causes a temporary split in the network as the nodes attempt to decide which block to continue building on. The block with the greater proof-of-work will be the one that the blockchain is continued to be built on-top of. The block with the smaller proof-of-work, is not chosen, and is referred to as the orphan block. An orphan block can also be produced if an attacker attempts to reverse a transaction . Stale blocks are often used interchangeably with orphan blocks because stale blocks are successfully mined blocks that were not included main chain. Therefore, if you see the word orphan block or stale block, be aware they mean very much the same thing. Uncle blocks are commonly associated with the Ethereum blockchain and are the equivalent of orphan blocks, but with a slight difference. Uncle blocks are still valid blocks that were mined, but then rejected. However, unlike with an orphan block where miners are not rewarded for mining them, miners are in fact rewarded for mining an uncle block. The rationale for this is twofold: Promote Continue reading >>
Ethereum: What Is Ethereum Mining? - The Economic Times
The maximum number of bitcoins are capped at 21 million while the total ether supply has no such cap Ethereum mining is fundamentally similar to bitcoin mining. Both use proof of work (PoW). PoW is a competitive activity that miners undertake to write transactions to a new block that will be added to the blockchain . A miner successfully mines a new block while competing with fellow miners by running a hashing script. Karan Bharadwaj, CTO of XinFin said, The specific scripts used in mining for bitcoin and ethereum are SHA-256(based script) and Ethash. Each block mined on ethereum also gives a payout of 5 ether to the miner. The bitcoin payout per block mined is 12.5 BTC that is set to halve to 6.25 in 2020. The maximum number of bitcoins are capped at 21 million while the total ether supply has no such cap. The developers behind the ethereum blockchain are working on shifting the mining algorithm from Proof of Work to Proof of Stake (PoS). PoS allows for the creation of new blocks with the expensive process of PoW mining. In PoS, each node participates in the consensus mechanism in a proportional manner to the stake (of the Ethereum blockchain) held by it, said Bharadwaj. With this shift to PoS, the block reward goes away and the miners are paid only in the form of transaction fees. This shift to PoS is going to remove the wasteful energy intensive process of mining while introducing additional security benefits to an already robust protocol. However, it is important to note that this is a very challenging implementation and not without complications. Rachit Chawla, CEO, Finway Capital said, Somewhat similar to bitcoin, Ethereum is also a popular cryptocurrency and ethereum mining is the process of mining ether; platform-specific cryptographic token, or simply, a uniqu Continue reading >>
A Gentle Introduction To Ethereum
Ethereum builds on blockchain and cryptocurrency concepts, so if you are not familiar with these, its worth reading a gentle introduction to bitcoin and a gentle introduction to blockchain technology first. This article assumes the reader has a basic familiarity with how Bitcoin works. Ethereum is software running on a network of computers that ensures that data and small computer programs called smart contracts are replicated and processed on all the computers on the network, without a central coordinator. The vision is to create an unstoppable censorship-resistant self-sustaining decentralised world computer. The officialwebsite is Itextends the blockchain concepts from Bitcoin which validates, stores, and replicates transaction data on many computers around the world (hence the term distributed ledger). Ethereum takes this one step further, and also runs computer code equivalently on many computers around the world. What Bitcoin does for distributed data storage, Ethereum does for distributed data storage plus computations. The small computer programsbeing run are called smart contracts, and the contractsare run by participants on their machines using asort ofoperating system called a Ethereum Virtual Machine. To run Ethereum, you can download (or write yourself if you have the patience) some software called an Ethereum client. Just like BitTorrent or Bitcoin, the Ethereum client will connect over the internet to other peoples computers running similar client softwareand start downloading the Ethereum blockchain from them to catch up. It will also independently validate that each block conforms to the Ethereum rules. What does the Ethereum client software do? You can use itto: Create new transactions and smart contracts Your computer becomes a node on the network, r Continue reading >>
How Does Ethereum Work,anyway?
Odds are youve heard about the Ethereum blockchain, whether or not you know what it is. Its been in the news a lot lately, including the cover of some major magazines, but reading those articles can be like gibberish if you dont have a foundation for what exactly Ethereum is. So what is it? In essence, a public database that keeps a permanent record of digital transactions. Importantly, this database doesnt require any central authority to maintain and secure it. Instead it operates as a trustless transactional system a framework in which individuals can make peer-to-peer transactions without needing to trust a third party OR one another. Still confused? Thats where this post comes in. My aim is to explain how Ethereum functions at a technical level, without complex math or scary-looking formulas. Even if youre not a programmer, I hope youll walk away with at least better grasp of the tech. If some parts are too technical and difficult to grok, thats totally fine! Theres really no need to understand every little detail. I recommend just focusing on understanding things at a broad level. Many of the topics covered in this post are a breakdown of the concepts discussed in the yellow paper. Ive added my own explanations and diagrams to make understanding Ethereum easier. Those brave enough to take on the technical challenge can also read the Ethereum yellow paper. A blockchain is a cryptographically secure transactional singleton machine with shared-state.  Thats a mouthful, isnt it? Lets break it down. Cryptographically secure means that the creation of digital currency is secured by complex mathematical algorithms that are obscenely hard to break. Think of a firewall of sorts. They make it nearly impossible to cheat the system (e.g. create fake transactions, erase tr Continue reading >>
What Is Ether?
Ether is a necessary element a fuel for operating the distributed application platform Ethereum. It is a form of payment made by the clients of the platform to the machines executing the requested operations. To put it another way, ether is the incentive ensuring that developers write quality applications (wasteful code costs more), and that the network remains healthy (people are compensated for their contributed resources). If you just want to test the technology, you probably don't need real ether. Download the latest Wallet app and switch to the Test Network Check your ether presale balance safely here: The total supply of ether and its rate of issuance was decided by the donations gathered on the 2014 presale. The results were roughly: 60 million ether created to contributors of the presale 12 Million (20% of the above) were created to the development fund, most of it going to early contributors and developers and the remaining to the Ethereum Foundation 5 ethers are created every block (roughly 15 seconds) to the miner of the block 2-3 ethers are sometimes sent to another miner if they were also able to find a solution but his block wasn't included (called uncle/aunt reward) Note that after the Byzantium update is implemented, the mining and uncle reward is reduced to 3 ethers and 0.625-2.625 ethers, respectively. No. According to the terms agreed by all parties on the 2014 presale, issuance of ether is capped at 18 million ether per year (this number equals 25% of the initial supply). This means that while the absolute issuance is fixed, the relative inflation is decreased every year. In theory if this issuance was kept indefinitely then at some point the rate of new tokens created every year would reach the average amount lost yearly (by misuse, accidental key Continue reading >>
Ethereum Vs. Bitcoin: Whats The Difference?
Ethereum vs. Bitcoin: Whats the Difference? In 1999,economics Nobel Prize winner Milton Friedman said, I think the internet is going to be one of the major forces for reducing the role of government. The one thing thats missing, but that will soon be developed, is a reliable e-cash. Ten years later, the digital currency Bitcoin was born. And for some time, this cryptocurrency dominated the market as Bitcoin rose to become the largest blockchain network. But recently, a new player entered the scene: Ethereum. The founder of this blockchain technology, Vitalik Buterin , envisioned a different path one that would include cryptocurrency but wouldnt be limited to it. But first, lets back up. What are Bitcoin and Ethereum and, more importantly, what are the differences between the two? At first glance, they might look pretty similar, but if you dig a little deeper, there are some major differences between the two technologies. Bitcoin was created by Satoshi Nakamoto, which is thought to be a group of people rather than a single person. The group first published a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System , which described exactly what Bitcoin is and how it works. Then, during 2009, the cryptocurrency Bitcoin was launched as an open-source software. At its launch, the exchange rate for Bitcoin was $1 for every 1,309.02 Bitcoins. The rate was created by figuring out the cost of electricity for running the computers that were generating Bitcoins. The first Bitcoin transaction that is known in the crypto community was for two Papa Johns pizzas. A man in Florida named Laszlo Hanyecz completed the transaction for 10,000 bitcoin (about $30 at the time) in exchange for those savory slices. 10,000 bitcoin is now worth about $10 million, to put that into perspe Continue reading >>
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 >>
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.  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.  "Gas", an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network.   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.  The system went live on 30 July 2015, with 11.9 million coins "premined" for the crowdsale.  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).    Ethereum was initially described in a white paper by Vitalik Buterin ,  a programmer involved with Bitcoin Magazine , in late 2013 with a goal of buildin Continue reading >>
Glossary Ethereum/wiki Wiki Github
See also: Computational infeasibility: a process is computationally infeasible if it would take an impracticably long time (eg. billions of years) to do it for anyone who might conceivably have an interest in carrying it out. Generally, 280 computational steps is considered the lower bound for computational infeasibility. Hash: a hash function (or hash algorithm) is a process by which a piece of data of arbitrary size (could be anything; a piece of text, a picture, or even a list of other hashes) is processed into a small piece of data (usually 32 bytes) which looks completely random, and from which no meaningful data can be recovered about the document, but which has the important property that the result of hashing one particular document is always the same. Additionally, it is crucially important that it is computationally infeasible to find two documents that have the same hash. Generally, changing even one letter in a document will completely randomize the hash; for example, the SHA3 hash of "Saturday" is c38bbc8e93c09f6ed3fe39b5135da91ad1a99d397ef16948606cdcbd14929f9d, whereas the SHA3 hash of Caturday is b4013c0eed56d5a0b448b02ec1d10dd18c1b3832068fbbdc65b98fa9b14b6dbf. Hashes are usually used as a way of creating a globally agreed-upon identifier for a particular document that cannot be forged. Encryption: encryption is a process by which a document (plaintext) is combined with a shorter string of data, called a key (eg. c85ef7d79691fe79573b1a7064c19c1a9819ebdbd1faaab1a8ec92344438aaf4), to produce an output (ciphertext) which can be "decrypted" back into the original plaintext by someone else who has the key, but which is incomprehensible and computationally infeasible to decrypt for anyone who does not have the key. Public key encryption: a special kind of encr Continue reading >>
Uncle Block (cryptocurrency)
BREAKING DOWN 'Uncle Block (Cryptocurrency)' A blockchain is formed by a growing chain of blocks that store details of the various transactions occurring on the blockchain network. Miners continue to mine for the new blocks following the standard mining process implemented by the blockchain. The newly found block is appended to the blockchain after verification, and the miner who found this new block is entitled to the block reward . The block height , which indicates the length of the blockchain, increases after the addition of the new block. However, at times,two different miners may generate a block simultaneously. This happens due to the working mechanism of the blockchain, which may not accept the newly identified blocks into the blockchain instantaneously. Due to this delay, a situation arises where another miner solves for the same exact block and tries to add it to the network chain. It results in a temporary yet dubious state of the blockchain network, as the various nodes try to build a consensus about which of the newly identified blocks to continue with, and which one to be rejected. The rejected ones are those which have a relatively lower share of proof of work (POW) and constitute the uncle blocks, while the ones with the larger share join the blockchain and work as a normal block. The name uncle is based on the lines of a family tree. Consider the blockchain as a family tree, with accepted blocksthe genuine"parent-child" in the tree. However, an uncle, though very close to the parent, isnt really a part of the nuclear family, hence related but separate from the family, or blockchain. Unlike the Bitcoin network which does not reward for orphan blocks, Ethereum incentivizesuncle block miners. Valid uncle blocks are rewarded in order to neutralize the effe Continue reading >>
How Ethereum Mining Works
Today, miners play an important role in making sure ethereum works. This role isn't immediately obvious, though. Many new users think that the sole purpose of mining is to generate ethers in a way that doesn't require a central issuer (seeour guide" What is Ether? "). This is true. Ethereum's tokens are created through the process of mining at a rate of 5 ether per mined block. But mining also has another at least asimportant role. Usually, banks are in charge of keeping accurate records of transactions. They ensure that money isn't created out of thin air, and that users don't cheat and spend their money more than once. Blockchains, though, introduce an entirely new way of record-keeping, one where the entire network, rather than an intermediary, verifies transactions and adds them to the public ledger. Although a 'trustless' or 'trust-minimizing' monetary system is the goal, someone still needs to securethe financial records, ensuring that no one cheats. Mining is one innovation that makes decentralized record-keeping possible. Miners come to consensus about the transaction history while preventing fraud (notably the double spending of ethers) an interesting problem that hadnt been solved in decentralized currencies before proof-of-work blockchains. Although ethereum is looking into other methods of coming to consensus about the validity of transactions, mining currently holds the platform together. Today, ethereum's mining process is almost the same as bitcoins . For each block of transactions, miners use computers to repeatedly and very quickly guess answers to a puzzle until one of them wins. More specifically, the miners will run the blocks unique header metadata (including timestamp and software version) through a hash function (which will return a fixed-length, Continue reading >>
What Is Ethereum? Ethereum Homestead 0.1 Documentation
Ethereum is 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 is an open-source project built by many people around the world. But unlike the Bitcoin protocol, Ethereum was designed to be adaptable and flexible. It is easy to create new applications on the Ethereum platform, and with the Homestead release, it is now safe for anyone to use those applications. Blockchain technology is the technological basis of Bitcoin, first described by its mysterious author Satoshi Nakamoto in his white paper Bitcoin: A Peer-to-Peer Electronic Cash System, published in 2008. While the use of blockchains for more general uses was already discussed in the original paper, it was not until a few years later that blockchain technology emerged as a generic term. A blockchain is a distributed computing architecture where every network node executes and records the same transactions, which are grouped into blocks. Only one block can be added at a time, and every block contains a mathematical proof that verifies that it follows in sequence from the previous block. In this way, the blockchains distributed database is kept in consensus across the whole network. Individual user interactions with the ledger (transactions) are secured by strong cryptography. Nodes that maintain and verify the network are incentivized by mathematically enforced economic incentives coded into the protocol. In Bitcoins case the distributed database is conceived of as a table of account balances, a ledger, and transactions are transfers of the bitcoin token to facilitate trustless finance between individuals. But as bitcoin began attracting greater attention from developers and technologists, novel p Continue reading >>
What Is The Ethereum Ice Age?
Ethereum is currently a Proof of Work cryptocurrency, meaning that computational power is needed, not only to produce new coinsbut to process transactions and to keep the entire ecosystem moving. In order to ensure the system is scalable and decentralized, Ethereum plans to move to a Proof of Stake protocol where a lot lesscomputational power is required and miners can earn rewards according to their balance. The Ethereum Foundation is still working on the Proof of Stake protocol, Casper. Since Casper is not finished and it's not contained in the release version of Ethereum a hard-fork might be required to implement this change. An hard-fork creates an incompatibility between the previous version and the latest, there is always the possibility to create a "split" that result in two blockchains, like Ethereum Classic , did on the 1920000th block, after the hard-fork to refund The DAO token holders took place . In order to ensure such event doesn't take place (although it did already) and to give themselves a time-frame to finish Casper (making the community aware of the introduction of a hard fork within that time-frame), a Difficulty Time Bomb, is also known as Ice Age was implemented in Ethereum. The Ethereum Ice Age is a difficulty adjustment scheme that was put in place to ensure that everyone has an incentive to move to the new blockchain once the hard-fork is implemented. It was introduced on the 7th of September (2015-09-07), about 11 months ago and it's programmed to raise difficulty exponentially. It's impossible for miners to keep up with the increase of difficulty which would raise block time and it would make the blockchain freeze, hencethe name Ice Age. The key part is the calculation for the increase in difficulty is Math.pow(2,Math.floor(block.number / 10 Continue reading >>
Blockchain - Ethereum Block Architecture - Ethereum Stack Exchange
Where can I find a description (preferably a diagram like below) showing the block structure in an Ethereum blockchain? Lets first start with my adaptation adaptation of this figure illustrating the Bitcoin block structure: Enter Ethereum and things get a wee bit more complex. After reading through this and this , and as per @ eth 's recommendation this , my best interpretation is the figure below: The header field definitions are available in section 4.3 of the yellow paper . Uncles is a hash (of a list of uncles), Yellow Paper has: "The Keccak 256-bit hash of the ommers list portion of this block". Codehash is just a hash since contracts are immutable. The pointers point to "hash of whole block header" (the Keccak-256 hash of all the bytes in the block header). To have a full diagram, should really consult the Yellow Paper... eth Jan 29 '16 at 22:53 Updated response after consulting the YP. Starting to get clearer now. Thanks! zanzu Feb 1 '16 at 12:34 Why are the transactions from block N linked to those of block N+1? Sebi Jun 10 '16 at 8:31 These links correspond to contract state that has not changed in between blocks. Referencing the state from the previous blocks instead of replicating is more efficient from a block size perspective. zanzu Jun 10 '16 at 9:49 Continue reading >>