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Ethereum

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Ethereum
Original author(s)Vitalik Buterin, Gavin Wood
Developer(s)Gavin Wood, Jeffrey Wilcke, Vitalik Buterin, et al.
Repository
Written inC++, Go, JavaScript, Python, Java, node.js, Haskell
Operating systemLinux, Windows, OS X, POSIX compliant
TypeDecentralized computing
LicenseMultiple open-source licenses
Websitewww.ethereum.org

Ethereum is a public blockchain platform with programmable transaction functionality.[1][2] It provides a decentralized virtual machine that can execute peer-to-peer contracts using a crypto asset called Ether (unofficial code ETH).[3]

The Ethereum system has been described as "a single shared computer that is run by the network of users and on which resources are parceled out and paid for by Ether."[4][unreliable source?]

Ethereum was initially proposed by Vitalik Buterin in late 2013, and the genesis block, marking the live release of the Ethereum project, occurred on 30 July 2015.[5][6] The Ethereum software project is advanced by a Swiss company, Ethereum Switzerland GmbH (EthSuisse)[7] and a non-profit foundation, the Ethereum Foundation.

History

Ethereum was initially described in a white paper by Russian cryptocurrency expert Vitalik Buterin in late 2013 with a goal of building decentralized applications.[6][8] As opposed to other "bitcoin 2.0" projects that were being built on top of the bitcoin protocol, Ethereum created its own blockchain to provide greater development flexibility by inclusion of a turing complete programming language.[9] In March 2014, Ethereum was described as being part of a group of projects with the potential to extend blockchain use beyond bitcoin's peer-to-peer money system.[10] While there was early praise for the technical innovations of Ethereum, questions were also raised about its security and scalability.[9]

Initial funding for the Ethereum project was provided by a public crowdsale that occurred in July 2014.[5][8] This crowdsale netted 31,529 bitcoins, worth approximately $18.5 million at the time, and in exchange 60,102,216 ether were later distributed to crowdsale participants.[11] Since the funding was raised in bitcoin, the project faced early financial difficulties after the value of bitcoin plunged shortly after the completion of the crowdsale.[12]

Ethereum's live blockchain was launched on 30 July 2015.[13] Since then it has gained attention as a platform for decentralized applications (DAPPs) and programmable transactions that are known as smart contracts.[4][14] The scope of applications include projects related to finance, the internet-of-things, identity management,[15] farm-to-table produce, electricity sourcing and pricing, and sports betting.[4] By March 2016, companies developing for the Ethereum distributed application platform included Microsoft, IBM, and JPMorgan Chase.[4]

Ether

Ether
Unit
SymbolΞ[16][non-primary source needed], ETH‎
Denominations
Subunit
 10−3finney
 10−6szabo
 10−18wei
Demographics
Date of introduction30 July 2015[13]Genesis block
User(s)Worldwide
Issuance
Currency typeCryptocurrency
 Websitewww.ethereum.org
Valuation
Issuance modelDisinflation[17][non-primary source needed]

The token unit of the Ethereum platform is called ether. It is traded on cryptocurrency exchanges like any other cryptocurrency.[18] It is used to pay for computational services on the Ethereum network. Ether is mined by proof-of-work,[19] with plans to move[when?] to a proof-of-stake[20] system called Casper.[21] Block rewards are constant over time, plus the transaction fees.[19] Even though that means the number of ether are unlimited with time, the annual inflation will tend to zero.

Contracts

Smart contracts are programs and protocols to facilitate the automated performance of a contract. Ethereum contracts can be implemented in various languages, compiled into bytecode for the Ethereum Virtual Machine (EVM) before being deployed to the blockchain.[22] The virtual machine's state updates can be written in a Turing complete scripting language.[23]

The platform uses a mechanism called gas to limit contracts that might take a long time to run, charging a certain amount of ether per computation.[24] Computation on the EVM is "very expensive" because every contract is run on every full Ethereum node, resulting in the consensus of the output.

Ethereum may be suitable for implementing many different types of contracts, such as security protocol logic[24] or financial derivatives. Decentralized autonomous organizations may enable a wide range of possible business models that were previously impossible or too costly to run.[25]

Trust and transparency

Trust is especially important in a few verticals, like financial services. As all contracts are stored in the blockchain, the code is public, and can be read by anyone (see the white paper for details). This makes it possible to verify the stated behavior of the contracts, which removes the need for trust in the owner. However, it can be difficult to interpret as contracts are compiled into EVM code. One solution is to compile the source code and compare with the EVM code. This provides the opportunity for public applications to be run in an unprecedentedly transparent fashion, with their pure machine instructions available for anyone to read.[26][unreliable source?] Open Execution is the guarantee that a caller of a service can know the exact outcome of a service, given its state and inputs. Further, the caller should understand the constraints of a service – what a service provider has restricted themselves from doing.[27]

There are blockchain explorers with support for this:

  • Etherchain.org shows the source code, together with all verification settings, displayed on the account page of the verified contract.[28][third-party source needed]
  • Ether.Camp makes it possible to investigate transactions of verified contracts, and what state is changed using the source code of the contracts.[29][30]

Implementations

The following full-node implementations of Ethereum are available:

Applications and ventures using Ethereum

  • ConsenSys, a blockchain startup focused on Ethereum technology.[45] It has facilitated the following ventures:
    • Ethereum Blockchain As a Service (EBaaS) on Microsoft Azure, which provides enterprise clients and developers with a cloud-based blockchain developer environment.[45]
    • TransActive Grid[46]
    • Ujo Music.[47] Imogen Heap used the technology with her single Tiny Human.[47]
  • Backfeed, socioeconomic platform[48]
  • Ethcore, a Ethereum-based private venture focusing on light clients and Internet of Things (IoT).[49]
  • FreeMyVunk, a gaming value platform.[50]
  • IBM ADEPT, an IoT system using Ethereum for smart contracts support.[51]
  • The Rudimental, an equity crowdfunding portal for arts and media.[52]
  • Slock.It, a system for building smart locks with Ethereum.[53]
  • Etheropt, a decentralized options exchange.[54]

Adoption challenges

The New York Times noted in March 2016 that Ethereum platform adoption is still early, and that Ethereum could encounter technical and legal problems going forward that would slow the growth of the distributed computing platform. Many Bitcoin advocates say that Ethereum may "face more security problems than Bitcoin because of the greater complexity of the software. Thus far, Ethereum has faced much less testing, and many fewer attacks, than Bitcoin."[4]

Sources

  • Narayanan, Arvind; Bonneau, Joseph; Felten, Edward; Miller, Andrew; Goldfeder, Steven (9 February 2016). "Bitcoin and Cryptocurrency Technologies" (PDF). cloudfront.net (Textbook draft). Retrieved 23 February 2016.

References

  1. ^ Gray, Jeff (7 April 2014). "Bitcoin believers: Why digital currency backers are keeping the faith". The Globe and Mail. Phillip Crawley. Retrieved 17 February 2016.
  2. ^ Vigna, Paul (28 October 2015). "BitBeat: Microsoft to Offer Ethereum-Based Services on Azure". The Wall Street Journal (Blog). News Corp. Retrieved 17 February 2016.
  3. ^ "What's the Big Idea Behind Ethereum's World Computer? – CoinDesk". CoinDesk. Retrieved 2016-03-20.
  4. ^ a b c d e Popper, Nathaniel (2016-03-27). "Ethereum, a Virtual Currency, Enables Transactions That Rival Bitcoin's". New York Times. Retrieved 2016-04-01.
  5. ^ a b "Ethereum Launches". Ethereum Blog. Retrieved 2016-03-21.
  6. ^ a b "Ethereum Launches Long-Awaited Decentralized App Network". CoinDesk. Retrieved 2016-03-21.
  7. ^ Schmid, Valentin (2014-05-10). "The Entrepreneur: Joe Lubin, COO of Ethereum". Epoch Times. Retrieved 2016-03-31.
  8. ^ a b Schneider, Nathan (7 April 2014). "Code your own utopia: Meet Ethereum, bitcoin's most ambitious successor". Al Jazeera America. Al Jazeera Media Network. Retrieved 21 February 2016.
  9. ^ a b Finley, Klint (27 January 2014). "Out in the Open: Teenage Hacker Transforms Web Into One Giant Bitcoin Network". Wired. Condé Nast. Retrieved 21 March 2016.
  10. ^ 2014-03-28T04:01:00Z, Olga Kharif-. "Bitcoin 2.0 Shows Technology Evolving Beyond Use as Money". Bloomberg. Retrieved 2016-03-21.{{cite web}}: CS1 maint: numeric names: authors list (link)
  11. ^ "Crypto 2.0 Roundup: Block Chain Bloat, Ethereum Completes Presale and a Crypto Football Team". CoinDesk. Retrieved 2015-11-13.
  12. ^ "Ethereum Creator Discloses $9 Million Funding Shortfall". CoinDesk. Retrieved 2016-03-21.
  13. ^ a b Caffyn, Grace (30 July 2015). "Ethereum Launches Long-Awaited Decentralized App Network". CoinDesk. Retrieved 12 April 2016.
  14. ^ Allison, Ian (20 January 2016). "R3 connects 11 banks to distributed ledger using Ethereum and Microsoft Azure". International Business Times. IBT Media. Retrieved 23 February 2016.
  15. ^ "What is Ethereum? • Coin Center". Coin Center. Retrieved 2016-03-20.
  16. ^ "The symbol for Ether is..." Ethereum Forum. 7 June 2014. Retrieved August 14, 2014.
  17. ^ "The Issuance Model in Ethereum". Ethereum Blog.
  18. ^ Sier, Jessica (11 February 2016). "Bitcoin rival Ethereum's price skyrockets". Australian Financial Review. Retrieved 22 February 2016.
  19. ^ a b Buterin, Vitalik (2014-01-23). "Ethereum: A Next-Generation Cryptocurrency and Decentralized Application Platform". Bitcoin Magazine. Retrieved 9 April 2014.
  20. ^ Demartino, Ian (26 October 2015). "Vitalik Buterin Speaks About the Ethereum Foundation, Proof-of-Stake and More". Retrieved 13 March 2016.
  21. ^ Allison, Ian (25 February 2016). "Blockchain experts provide contrasts and predictions on consensus protocols". International Business Times. Retrieved 22 March 2016.
  22. ^ Narayanan et al. pp286-287
  23. ^ Jon, Evans. "Vapor No More: Ethereum Has Launched". www.techcrunch.com. Retrieved 25 February 2016.
  24. ^ a b Narayanan et al. p288
  25. ^ "Decentralized Autonomous Organizations: Ethereum Sparks Up Googles of Tomorrow".
  26. ^ "A Strategy for Contract Transparency in Ethereum".
  27. ^ Carver, Jason (2016-04-06). "How "Open Execution" will replace Open Source".
  28. ^ etherchain.org. "Tools – etherchain.org – The ethereum blockchain explorer". etherchain.org. Retrieved 2016-03-21.
  29. ^ "Microsoft To Unveil Ethereum Blockchain-As-A-Service Next Month". EconoTimes. 29 October 2015. Retrieved 22 March 2016.
  30. ^ Maras, Elliot (14 March 2016). "Ether.camp Develops Hybrid Bitcoin/Ethereum ATM". CryptoCoinsNews. Retrieved 22 March 2016.
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  32. ^ "Press – Ethcore". ethcore.io.
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  34. ^ ethereum. "GitHub – ethereum/webthree-umbrella: Umbrella project for the Ethereum C++ implementation". GitHub.
  35. ^ Roman Mandeleil. "Ethereum J". ethereumj.io.
  36. ^ "Ethereum(J) — Ethereum Homestead 0.1 documentation". readthedocs.org. Retrieved 5 April 2016.
  37. ^ ethereum. "GitHub – ethereum/pyethapp". GitHub.
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  40. ^ jamshidh. "GitHub – jamshidh/ethereum-client-haskell". GitHub. Retrieved 5 April 2016.
  41. ^ janx. "GitHub – janx/ruby-ethereum: A Ruby implementation of Ethereum". GitHub.
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  43. ^ Davis, Katherine (14 March 2016). "New ridesharing service takes aim at Uber". Crain's Chicago Business. Retrieved 16 March 2016.
  44. ^ Doherty, Brian (15 March 2016). "Can the Blockchain Kill Uber? Free State Project Participant Launches "Arcade City"". Reason. Retrieved 16 March 2016.
  45. ^ a b Giulio Prisco. "Microsoft Launches Ethereum Blockchain as a Service (EBaaS) at Devcon, Boosts Ethereum". Bitcoin Magazine.
  46. ^ Rutkin, Aviva (2 March 2016). "Blockchain-based microgrid gives power to consumers in New York". New Scientist. Reed Business Information. Retrieved 24 March 2016.
  47. ^ a b Allison, Ian (4 October 2015). "Imogen Heap shows how smart music contracts work using Ethereum". International Business Times. Retrieved 24 March 2016.
  48. ^ Weinglass, Simona (19 August 2015). "Backfeed wants to decentralize the Internet and help you earn what you deserve". Geektime.com. Retrieved 24 March 2016.
  49. ^ "Ethcore Announces Pre-release Of Its Blockchain Technology Suite 'Parity'". EconoTimes. 11 February 2016. Retrieved 24 March 2016.
  50. ^ Allison, Ian (22 December 2015). "Game-changers FreeMyVunk and Digix allow video gamers to trade virtual assets for physical gold". International Business Times. Retrieved 24 March 2016.
  51. ^ "IBM Reveals Proof of Concept for Blockchain-Powered Internet of Things". CoinDesk.
  52. ^ Parker (11 February 2016). "Interview with Troy Murray, CEO of The Rudimental". Sebfor.com. Retrieved 24 March 2016.
  53. ^ Ian Allison. "Ethereum-based Slock.it reveals first ever lock opened with money". International Business Times UK.
  54. ^ "Decentralized Options Exchange Etheropt Uses Automated Ethereum Smart Contract".
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