BCHGraz - Meetup #8 - Intro & Ethereum

BlockchainHub GrazMeetup #8

BlockchainHub Graz■ Thomas Zeinzinger■ Feb. 27, 2017

Thomas Max Sandra Tom Didi

Shermin Jean-Luc

Hannes

# Not-For-Profit # Translate Blockchain to Non Techies# Connect various Networks and Organizations

Get to know each other

Find yourself a buddy!

My name is “_____”, and I am interested in “_____”. I am a:1. Blockchain Tech newbie2. Blockchain Tech intermediary3. Blockchain Tech expert

I am here to:1. Find someone who explains

Blockchain Tech to me2. Socialize3. Talk about a project4. Search for investments5. …

Collective... getting things started

So – who was first?

Money Collective Project

CollectiveCommunication

Interested in the “lab10 collective“ or the “BlockchainHub“ – shoot a message to [email protected] stating the e-mail address you would like to be

invited with.

Meetup – BlockchainHub GrazNEW

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Bitcoin Unlimited vs. SegwitNEW

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Status: 20.02.2017

Activation threshold is ≥1916 blocks (95% of last 2016 blocks)

Winklevoss brothers seek to launchETF (Exchange Traded Fund) N

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Today ETF investors can only access bitcoins through a small allocation in the ARK Web x.0 ETF (ARKW), which obtains its exposure through publicly traded shares of Grayscale’s Bitcoin Investment Trust (OTCQX: GBTC).If launched, COIN would list on Bats, which owns ETF.com.

Next decision by SEC: March 11th, 2017

100 Mill. $

Swift reveales “real-time” x-border transactionsN

EWS

As part of the formal rollout, Swift (or the Society for Worldwide Interbank Financial Telecommunication) revealed that 12 of the world's largest banks have been conducting real-time transactions via its Global Payments Innovation (GPI) project for some months.

As of early this morning, initial GPI users – a group that includes the Bank of China, BBVA, Citi, ING Bank and Standard Chartered – will have conducted "tens of thousands of transactions" between 60 country corridors, Raymaekers said.Instead of rebuilding Swift's cross-border payments infrastructure from scratch, the GPI has been constructed as a set of business rules encoded on top of the existing infrastructure with an eye to increasing speed, transparency and the traceability of transactions.On top of those rules, Swift has further created a transaction tracking mechanism supported by cloud computing, with a graphical user interface designed to show exactly where a payment will be, should it get held up.

• Faster, same day use of funds• Transparency of fees• End-to-end payments tracking• Remittance information

transferred unaltered

Regulation ActivitiesNEW

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Ethereum News

Dubbed Enterprise Ethereum, the project's founding membership is said to include major financial institutions, tech giants and natural resources companies. According to sources, participating firms include JP Morgan, CME Group, BNY Mellon, Banco Santander, Microsoft, Red Hat, Cisco, Wipro and British Petroleum, among others.Blockchain startups BlockApps, Brainbot Technologies, ConsenSys, Nuco and Tendermint – as well as the Ethereum Foundation, the non-profit that oversees its code creation – are also said to be involved.

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... a little bit of history

1997: Adam Back proposed “hashcash“ incorporating proof-of-work to limit e-mail spam and denial-of-service attacks. 1998: Wei Dai created “b-money“, Nick Szabo created “Bit Gold“ and Hal Finney developed “RPOW”. All these cryptocurrencies used hashcash as their proof-of-work algorithm. 2004: BitTorrent emerged – it is the most used Peer-2-Peer file sharing communication protocol with approx. 250 million users per month. 2008: Bitcoin was introduced by Satoshi Nakamoto (identity unknown) with a paper called “bitcoin: A Peer-to-Peer Electronic Cash System”. 2009: The first open source bitcoin client went live and mining of bitcoins started. By definition there are only 21 million Bitcoin (BTC) possible.2013: Ethereum was first described by Vitalik Buterin: “Ethereum: A Next-Generation Cryptocurrency and Decentralized Application Platform”

Bitcoin“Depending on your point of

view, you could see some problems with Bitcoin.”

• Block Timehigh variation, 10 min. average

• Finality very long lead time, 6 blocks

• Consensus - PoWsecurity vs. waste of energy

• Governancelong consensus time, e.g. Segwit vs. BU

• Extensibilityvery tough, scripting language

• Scalabilitylimited by protocol, ~ 280 kTx per day

Bitcoin – Ethereum Comparison

Block Time High variation, average 10 min. High variation, average 15 sec.

Finality 6 block confirmations, ≈ 60 min. 12 (25) block confirmations, ≈ 3 (6) min.

Consensus PoW, energy waste for security PoW for distribution, Plan: transition to PoS

Governance slow decisions, conservative actively developed, leadership

Scalability 3 Tx/s, Plan: payment channels 15 Tx/s, Plan: payment channels, sharding

Extensibility hard, simple scripting language simple, smart contract + EVM

Web 3.0 Platform

Ethereum – Devcon 0 / Berlin 2014

Ethereum Software Release Dates

Source: http://decentral.ca/wp-content/uploads/2016/03/infographic.jpg

Basic Differences Ethereum vs. BitcoinEther

Ether – Main purpose:• Cryptocurrency to run the state machine of Ethereum

• Cryptocurrency traded on exchanges

Basic Differences Ethereum vs. BitcoinAccounts

Externally Owned Accounts (EAOs) simple „Accounts“

State: Balance

Contract Accountssimple „Contracts“

State: Balance & Storage

State Objects

• has an ether balance,• can send transactions (ether transfer or

trigger contract code),• is controlled by private keys,• has no associated code.

• has an ether balance,• has associated 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

Basic Differences Ethereum vs. BitcoinSmart Contracts

Smart Contracts are:

Ø pre-written logic,

Ø stored and replicated on a blockchain,

Ø executed/run by a network of computers

Ø and can result in blockchain updates

If blockchains give us distributed trustworthy storage, then smart contracts give us distributed trustworthy calculations.

Source: https://bitsonblocks.net/2016/02/01/a-gentle-introduction-to-smart-contracts/

Basic Differences Ethereum vs. BitcoinGAS

Messages• Inter-contract communication

• Messages are triggered by Transactions (defines GASPRICE)

• STARTGAS applies for the transaction and all subsequent computations

Transactions• Signed Message from EOA (Externaly Owned Accounts)

• Signature Sender / Address Recipient / Ether transferred

• STARTGAS - is the amount of ”GAS" that the transaction assigns itself• GASPRICE - is the fee that the transaction pays per unit of gas

Attention: Insufficient STARTGAS à pay miner / no state change

Basic Differences

Ethereum vs. Bitcoin

• “GAS“ limit defines transactions per second

• Adjustment of “GAS“ limit with every block

• Also used to counteract DDoS attacks

Bitcoin

Ethereum

GAS limit can increse by 1+1/1024 with every block andin the early olympic testnet it reached around 25tx/s.

Live View: https://ethstats.net/

Source: http://ethereum.stackexchange.com/questions/3308/how-do-i-compare-the-scalability-capabilities-between-ethereum-and-bitcoin

Basic Differences Ethereum vs. BitcoinConsensus: GHOST Protocol

The modified GHOST (Greedy Heaviest-Observed Sub-Tree) of Ethereumtackles two problems by including stale blocks:

• Network Propagation Time • Miner Centralization

GHOST Protocol: http://www.cs.huji.ac.il/~avivz/pubs/13/btc_scalability_full.pdf

122

Source: https://genius.com/Ethereum-ethereum-whitepaper-annotated

123 124 125 126A

123 124B

Basic Differences Ethereum vs. BitcoinMining

Ethash (Dagger – Hashimoto)• ASIC-resistance

• Light client verifiability

Source: https://github.com/ethereum/wiki/blob/master/Dagger-Hashimoto.md

Mining Block Reward• 5 ETH/Block

• 1/32 of Block Reward for every Uncle Block (max. 2)

• All ETH for transactions and EVM computation

Uncle Block Reward• 7/8 of Block Reward à 4.375 ETH/Block

Basic Differences Ethereum vs. BitcoinInflation

Source: https://bitsonblocks.net/2016/10/02/a-gentle-introduction-to-ethereum/

Basic Differences

Ethereum vs. Bitcoin

Merkle Patricia trees provide a cryptographically authenticateddata structure that can be used tostore all (key, value) bindings.

Merkle Patricia Tree

Source: https://github.com/ethereum/wiki/wiki/Patricia-Tree

Bitcoin – Ethereum Comparison

Block Time High variation, average 10 min. High variation, average 15 sec.

Finality 6 block confirmations, ≈ 60 min. 12 (25) block confirmations, ≈ 3 (6) min.

Consensus PoW, energy waste for security PoW for distribution, Plan: transition to PoS

Governance slow decisions, conservative actively developed, leadership

Scalability 3 Tx/s, Plan: payment channels 15 Tx/s, Plan: payment channels, sharding

Extensibility hard, simple scripting language simple, smart contract + EVM

Block Time, Finality & Consensus: Proof-of-Stake (Casper)

Proof-of-Work(Ethash)

Proof-of-Stake(Casper)

(1) Source: https://motherboard.vice.com/en_us/article/bitcoin-could-consume-as-much-electricity-as-denmark-by-2020

BitcoinPessimisticSzenario:14 Gigawatts of electricity by2020 (1)

Casper tackles following issues:• Energy Wastage• Security • Speed

Casper wants to solve problems with “crypto economics”:• 'nothing-at-stake' problem• 'long-range-attack' problem• 'bounding the griefing factor' problem• 'repeated signing of finalized blocks'

Extensability: Example – ERC 20 Token

Can represent any asset, e.g.local currency, voucher, 1 hour worth of baby sitting, promise for a crowd funded product, insurance policy, event ticket, …

Token standard ERC-20

Smart contract can implement features like:multi-party issuance control, asset freezing rules, dependency on events in the real world, ...

Scalability: Raiden (Payment Channels)

Developed by Brainbot Technologies AG, Berlin

Scalable: it scales linearly with the number of participants (1,000,000+ transfers per second possible)

Fast: Transfers are confirmed and final within the fraction of a second

Confidential: Single transfers don’t show up in the global shared ledger

Interoperable: Works with any token that follows Ethereum’s standardized token API

Low Fees: Transaction fees can be 7 orders of magnitude lower than on the blockchain

Micro-payments: Low transaction fees allow to efficiently transfer tiny values

Raiden is implemented as an extension to Ethereum. A Raiden node runs alongside an Ethereum node and communicates with other Raiden nodes to facilitate transfers and with the Ethereum blockchain to manage deposits. It offers a simple API which makes it easy to use Raiden in DApps.

Scalability: Raiden (Payment Channels)

Source: Lefteris Karapetsas - https://www.youtube.com/watch?v=JuVP4iDVkoQ&feature=youtu.be&list=PLaM7G4Llrb7wPiT2G75tj2JQr8qg6P5hi

• All balances are updated off-chain.

• Bidirectional – Two deposits

• Settlement is comprised of two netted balances

• Each participant tracks both balances

Scalability: Blockchain Sharding

Known concept

Tradeoff: Security vs. Cost

Distributes the distributed database

Exploring Ethereum - Statistics

50 kTx/d 4 Mill Gas Limit

Feb. 24th, 2017 Source: https://etherscan.io/charts

Approx. 23*109 Wei = 23*10-9 Ether

Exploring Ethereum - Statistics

https://ethereumwisdom.com/

https://etherchain.org/

https://www.ethernodes.org

https://ethstats.net/

Ethereum - DAppshttp://dapps.ethercasts.com/

Use Cases – Ethereum Smart ContractsIN

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Today we demonstrate the following Ðapps:

SOC

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Thomas Zeinzinger@leantom42thomas zeinzinger