Ethereum

Ethereum

The Ethereum Project's logo, first used in 2014.
Initial release 30 July 2015
Repository github.com/ethereum/go-ethereum
Development status Active
Operating system Clients available for Linux, Windows, OS X, POSIX
Type Decentralized computing
License Multiple open-source licenses
Website www.ethereum.org

Ethereum is a public blockchain-based distributed computing platform, featuring smart contract functionality.[1] It provides a decentralized virtual machine, the Ethereum Virtual Machine (EVM), that can execute peer-to-peer contracts using a token called ether.

Ethereum was initially proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer. Development was funded by an online crowd sale during July–August 2014.[2]

History

Origin

Ethereum was initially described in a white paper by Vitalik Buterin,[3] a programmer involved with Bitcoin, in late 2013 with a goal of building decentralized applications.[4][5] More specifically, Buterin "had argued to the bitcoin core developers that the platform needed a more robust scripting language for developing applications." Failing to gain agreement, he proposed development of a new platform with a more general scripting language.[6]:88 Buterin believes that many applications could benefit from Bitcoin-like software.[4]

The Ethereum software project was initially developed in early 2014 by a Swiss company, Ethereum Switzerland GmbH (EthSuisse).[7][8] Subsequently, a Swiss non-profit foundation, the Ethereum Foundation (Stiftung Ethereum) was set up as well.[2] Development was funded by an online public crowdsale during July–August 2014, with the participants buying the Ethereum value token (ether) with another digital currency, bitcoin.[2] While there was early praise for the technical innovations of Ethereum, questions were also raised about its security and scalability.[4]

Launch

Ethereum's live blockchain was launched on 30 July 2015.[9][10] The initial version of Ethereum—called "Frontier"—uses a proof of work consensus algorithm, although a later version is expected to replace that with a proof of stake algorithm.[6]:32

Ethereum hard forks

Since the initial version Ethereum network has accomplished some 'hard forks'. First hard fork introduced the difficulty bomb to incentivize an upgrade to proof of stake and as of November 2016 5th fork is under development.[11]

The second hardfork: Homestead

The second hardfork was made spring 2016 a marked the first stable release, and the network was called Homestead.

Third hard fork: The DAO and the blockchain fork

In June 2016, The DAO, a platform for the autonomous governance of investment capital, was found to contain an unexpected code path which would allow any sophisticated user to withdraw an arbitrary amount of funds from the DAO. This was indeed exploited by an unknown party on the 16th of June, who managed to move about one third of the Ether held then by the DAO (at the time valued at 50 million USD) into a clone of the DAO, a "ChildDAO" whose control was held by only this party.[12][13] As a consequence of the way the DAO was programmed, these moved funds would remain unavailable for withdrawal for about a month.[14]

The Ethereum community debated how and whether to reclaim the ether, and whether to shut down The DAO,[14] as the decentralised nature of The DAO and of Ethereum meant a lack of a central authority that could take quick action, instead requiring community consensus.[13] After a few weeks' discussion, The DAO was shut down, and on 20 July 2016 Ethereum hard-forked (a backward-incompatible change[15]) creating a new fork to reverse the hack and return The DAO funds, with the original chain adopting the name Ethereum Classic.[16] This was the first time any mainstream blockchain was forked to reverse a transaction without a valid signature in order to make reparations to investors in a failed enterprise.[15]

After The DAO fork, Ethereum and Ethereum Classic have both subsequently forked multiple times to deal with other different attacks.[17][18]

Ether

Ether
Denominations
Symbol ETH
Demographics
User(s) Worldwide
Issuance
Currency type Cryptocurrency

The value token of the Ethereum blockchain is called ether. It is listed under ETH and is traded on cryptocurrency exchanges like any other cryptocurrency;[19] it is also used to pay for transaction fees and computational services on the Ethereum network.[20]

Controversially, Buterin sold 25% of his ETH holding in April 2016,[21] describing this diversification as "sound financial planning," and also quoted Gavin Andresen’s statement concerning Bitcoin: "I still say that it’s an experiment, and the whole thing could implode."[22]

Tokens can be volatile per circumstances, such as ether's plunge from $21.50 to $15 when The DAO was hacked on June 17, 2016.[13]

Smart contracts

Main article: Smart contract

Smart contracts are applications with a state stored in the blockchain.[23] They can facilitate, verify, or enforce the negotiation or performance of a contract. Ethereum contracts can be implemented in various Turing complete scripting languages.[24] The Ethereum system has been described by the New York Times 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."[20][25]

Contracts on the public blockchain

One issue related to using smart contracts on a public blockchain is that bugs, including security holes, are visible to all but cannot be fixed quickly.[26] One example of this is the 17 June 2016 attack on The DAO, which could not be quickly stopped or reversed.[12] The buggy contract was fixed with a controversial hardfork that restored the hack transaction on the Ethereum blockchain.[16]

There is ongoing research on how to use formal verification to express and prove non-trivial properties. A Microsoft Research report noted that writing solid smart contracts can be extremely difficult in practice, using The DAO hack to illustrate this problem. The report discussed tools that Microsoft had developed for verifying contracts, and noted that a large scale analysis of published contracts is likely to uncover widespread vulnerabilities. The report also stated that it is possible to verify the equivalence of a Solidity program and the EVM code.[27]

Programming languages

Main article: Solidity

The Ethereum Virtual Machine (EVM) works on a protocol defined in the Ethereum Yellow Paper by Gavin Wood.[28] Solidity is the JavaScript-like programming language designed for developing smart contracts that run on the Ethereum Virtual Machine (EVM). Solidity is compiled to bytecode which is executable on the EVM. Using Solidity, developers can write applications that implement self-enforcing business logic embodied in smart contracts.[29]

Performance

In Ethereum all smart contracts are stored publicly on every node of the blockchain, which has trade-offs.[30] The downside is that performance issues arise in that every node is calculating all the smart contracts in real time, resulting in slower speeds.[30] Ethereum engineers have been working on sharding the calculations, but no solution had been detailed by early 2016.[30] As of January 2016, the Ethereum protocol could process 25 transactions per second.[30] In September 2016, Buterin presented proposals to increase scalability.[31]

Uses

The Ethereum platform has multiple proposed uses concerning smart contracts. Bloomberg Businessweek describes it as "shared software that can be used by all but is tamperproof."[32]

Higher-level software can utilize Ethereum to establish an online marketplace platform.[2]

Applications

Ethereum is used as a platform for decentralized applications, decentralized autonomous organizations and smart contracts, with "dozens of functioning applications built" on it by March 2016 according to the New York Times.[20][33] The intended scope of applications include projects related to finance, the internet-of-things, farm-to-table produce, electricity sourcing and pricing, and sports betting.[20] Decentralized autonomous organizations may enable a wide range of possible business models that were previously impossible or too costly to run.[34] Notable Ethereum applications include:

Software implementations

Geth and Parity are some of the implentations of Ethereum technology.

Enterprise software

Ethereum is also being tested by enterprise software companies for various applications. Previously-established interested parties included Microsoft, IBM, and JPMorgan Chase.[20]

Permissioned ledgers

Ethereum is used and being investigated as a permissioned blockchain in various projects.

Adoption

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."[20] The article also said, "The system is complicated enough that even people who know it well have trouble describing it in plain English".[20]

Microsoft announced a partnership with ConsenSys, a blockchain startup focused on Ethereum technology. Customers of popular cloud-based business service Microsoft Azure have access to third-party tools that "allow them to experience and build with cloud-based blockchain applications, from securities trading to cross-border payments".[1]

Market Capitalization

By May 2016, the market capitalization of the cryptocurrency ether was more than US$1 billion and Vox noted that the relatively new digital currency was challenging bitcoin by offering a range of services that are not possible using bitcoin.[58]

Ethereum Classic

People who hold Ether from before the hard-fork have a possible balance of ETH in addition to an equal amount of Classic Ether (ETC). Exchanges that hold customer funds are also in control of the ETC in proportional quantity to their ETH holdings prior to the hard-fork. Users at most ETH exchanges are demanding their ETC be made available to them.[59] As of 11 August 2016, both Ethers are actively traded.[60]

The ETC chain did a hard fork to adjust the internal pricing for running various op codes on the Ethereum Virtual Machine (EVM) on 25 October 2016, similar to the hard fork the ETH chain did a week earlier. The goal was to more rationaly price various compute-intensive and external reference commands to reduce the incentive for spammers who had conducted a month-long distributed denial-of-service attack on the ETC network.[61]

See also

References

  1. 1 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.
  2. 1 2 3 4 5 Aitken, Roger (23 April 2016). "Digital Gold 'Done Right' With DigixDAO Crypto-Trading On OpenLedger". Forbes. Retrieved 28 April 2016.
  3. ↑ https://github.com/ethereum/wiki/wiki/White-Paper
  4. 1 2 3 Finley, Klint (27 January 2014). "Out in the Open: Teenage Hacker Transforms Web Into One Giant Bitcoin Network". Wired. Retrieved 21 March 2016.
  5. ↑ Schneider, Nathan (7 April 2014). "Code your own utopia: Meet Ethereum, bitcoin's most ambitious successor". Al Jazeera. Retrieved 21 February 2016.
  6. 1 2 Tapscott, Don; Tapscott, Alex (May 2016). The Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World. ISBN 978-0670069972.
  7. ↑ Schmid, Valentin (10 May 2014). "The Entrepreneur: Joe Lubin, COO of Ethereum". Epoch Times. Retrieved 31 March 2016.
  8. ↑ "Company Overview of Ethereum Switzerland GmbH". Bloomberg. 2016-08-20. Archived from the original on 2016-08-20. Retrieved 2016-08-20. The company was founded in 2014 and is based in Baar, Switzerland.
  9. ↑ Tapscott, Don; Tapscott, Alex (May 2016). The Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World. p. 87. ISBN 978-0670069972. July 30, 2015, ... Ethereum ... went live. ... Ethereum is like bitcoin in that its ether motivates a network of peers to validate transactions, secure the network, and achieve consensus about what exists and what has occurred. But unlike bitcoin it contains some powerful tools to help developers and others create software services ranging from decentralized games to stock exchanges. ... a more robust scripting language for developing applications.
  10. ↑ http://www.nytimes.com/2016/03/28/business/dealbook/ethereum-a-virtual-currency-enables-transactions-that-rival-bitcoins.html?_r=0 Retrieved September-2-2016
  11. ↑ https://www.cryptocoinsnews.com/ethereum-prepares-spurious-dragon-hardfork/
  12. 1 2 Popper, Nathaniel (17 June 2016). "Hacker May Have Taken $50 Million From Cybercurrency Project". The New York Times.
  13. 1 2 3 Price, Rob (17 June 2016). "Digital currency Ethereum is cratering amid claims of a $50 million hack". Business Insider.
  14. 1 2 3 Klint Finley for Wired. June 18, 2016 A $50 Million Hack Just Showed That The Dao Was All Too Human
  15. 1 2 Peck, Morgan (19 July 2016). ""Hard Fork" Coming to Restore Ethereum Funds to Investors of Hacked DAO". IEEE Spectrum: Technology, Engineering, and Science News. IEEE. Retrieved 20 July 2016.
  16. 1 2 Vigna, Paul (20 July 2016). "Ethereum Gets Its Hard Fork, and the 'Truth' Gets Tested". Moneybeat. The Wall Street Journal. Retrieved 20 July 2016.
  17. ↑ Redman, Jamie (14 October 2016). "Ethereum to Hard Fork Two More Times Following Recent Attacks". Bitcoin.com. Bitcoin.com. Retrieved 22 November 2016.
  18. ↑ Hertig, Alyssa (25 October 2016). "The Blockchain Created By Ethereum's Fork is Forking Now". CoinDesk. CoinDesk. Retrieved 22 November 2016.
  19. ↑ Sier, Jessica (11 February 2016). "Bitcoin rival Ethereum's price skyrockets". Australian Financial Review. Retrieved 22 February 2016.
  20. 1 2 3 4 5 6 7 8 Nathaniel Popper for the New York Times. March 27, 2016 Ethereum, a Virtual Currency, Enables Transactions That Rival Bitcoin’s
  21. ↑ Buntinx, JP (23 April 2016). "Ethereum Developer Vitalik Buterin Sold 25% Of His Coins". The Merkle. Retrieved 27 April 2016.
  22. ↑ "Vitalik Buterin Sold a Quarter of His ETH Tokens". ForkLog Magazine. 26 April 2016. Retrieved 27 April 2016.
  23. ↑ http://blockgeeks.com/guides/smart-contracts-the-blockchain-technology-that-will-replace-lawyers/
  24. ↑ Jon, Evans. "Vapor No More: Ethereum Has Launched". techcrunch.com. Retrieved 25 February 2016.
  25. ↑ "The great chain of being sure about things". The Economist. 31 October 2015. Retrieved 4 May 2016. All sorts of companies and public bodies suffer from hard-to-maintain and often incompatible databases and the high transaction costs of getting them to talk to each other. This is the problem Ethereum, arguably the most ambitious distributed-ledger project, wants to solve. ... Ethereum’s distributed ledger can deal with more data than bitcoin’s can. And it comes with a programming language that allows users to write more sophisticated smart contracts, [that among other things] allow the formation of "decentralised autonomous organisations"—virtual companies that are basically just sets of rules running on Ethereum’s blockchain.
  26. ↑ Peck, M. (28 May 2016). "Ethereum's $150-Million Blockchain-Powered Fund Opens Just as Researchers Call For a Halt". IEEE Spectrum. Institute of Electrical and Electronics Engineers.
  27. ↑ "Short Paper: Formal Verification of Smart Contracts" (PDF). microsoft.com/. Microsoft. Retrieved 25 August 2016.
  28. ↑ Ethereum Yellow Paper by Gavin Wood
  29. ↑ Allison, Ian (30 March 2016). "Microsoft adds Ethereum language Solidity to Visual Studio". International Business Times. Retrieved 11 May 2016.
  30. 1 2 3 4 Allison, Ian (25 January 2016). "How are banks actually going to use blockchains and smart contracts?". International Business Times. Retrieved 4 May 2016.
  31. ↑ http://www.coindesk.com/ethereum-creator-vitalik-buterin-scaling-devcon2/
  32. ↑ "This Is Your Company on Blockchain". Bloomberg Businessweek. Retrieved 2016-09-14.
  33. 1 2 Allison, Ian (20 January 2016). "R3 connects 11 banks to distributed ledger using Ethereum and Microsoft Azure". International Business Times. Retrieved 23 February 2016.
  34. ↑ Bordet, Julián (21 March 2016). "Decentralized Autonomous Organizations: Ethereum Sparks Up Googles of Tomorrow". The Cointelegraph. Retrieved 21 July 2016.
  35. ↑ Rennie, Ellie (12 May 2016). "The radical DAO experiment". Swinburne News. Swinburne University of Technology. Retrieved 12 May 2016. When it reaches the end of the funding phase on May 28, it will begin contracting blockchain-based start-ups to create innovative technologies. The extraordinary thing about The DAO is that no single entity owns it, and it has no conventional management structure or board of directors.
  36. 1 2 Allison, Ian (30 April 2016). "Ethereum reinvents companies with launch of The DAO". International Business Times. Retrieved 1 May 2016.
  37. ↑ Vigna, Paul (16 May 2016). "Chiefless Company Rakes In More Than $100 Million". The Wall Street Journal. Retrieved 16 May 2016.
  38. ↑ Weinglass, Simona (19 August 2015). "Backfeed wants to decentralize the Internet and help you earn what you deserve". Geektime.com. Retrieved 24 March 2016.
  39. ↑ "Ethcore Announces Pre-release Of Its Blockchain Technology Suite 'Parity'". EconoTimes. 11 February 2016. Retrieved 24 March 2016.
  40. ↑ Young, Joseph. "Chronicled Introduces New Ethereum-Powered IoT Open Registry". Nasdaq.
  41. ↑ 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.
  42. ↑ Parker (11 February 2016). "Interview with Troy Murray, CEO of The Rudimental". Sebfor.com. Retrieved 24 March 2016.
  43. ↑ Rutkin, Aviva (2 March 2016). "Blockchain-based microgrid gives power to consumers in New York". New Scientist. Retrieved 24 March 2016.
  44. ↑ Allison, Ian. "Ethereum-based Slock.it reveals first ever lock opened with money". International Business Times UK.
  45. ↑ "Decentralized Options Exchange Etheropt Uses Automated Ethereum Smart Contract".
  46. ↑ "DigixDAO Token Trading to Launch on Gatecoin". Smith+Crown. 27 April 2016. Retrieved 29 May 2016.
  47. ↑ Buntinx, JP (28 April 2016). "DigixDAO DGD Assets To Be Listed on OpenLedger". The Merkle. Retrieved 29 May 2016.
  48. ↑ Allison, Ian (4 October 2015). "Imogen Heap shows how smart music contracts work using Ethereum". International Business Times. Retrieved 24 March 2016.
  49. ↑ Allison, Ian (September 12, 2016). "Decentralized Capital issuing fiat-backed digital assets on the Ethereum blockchain". International Business Times.
  50. ↑ "Luxembourg Stock Exchange introduces blockchain into reporting service". 2016-10-18. Retrieved 2016-11-04.
  51. ↑ Allison, Ian (3 May 2016). "Deloitte to build Ethereum-based 'digital bank' with New York City's ConsenSys". International Business Times.
  52. ↑ "Hyperledger blockchain code almost comes together for IoT". Rethink Research. Retrieved 23 April 2016.
  53. ↑ "UK Government Awards £248k for Ethereum Prototype". CoinDesk.
  54. ↑ "Settlement using blockchain to Automate Foreign Exchange in a Regulated environment (SAFER)". Innovate UK.
  55. ↑ Hacket, Robert. "Why J.P. Morgan Chase Is Building a Blockchain on Ethereum". Fortune.
  56. ↑ "Proving Ethereum for the Clearing Use Case" (PDF).
  57. ↑ Peyton, Antony. "R3 ends "first of its kind" blockchain trial with 40 banks". Banking Technology.
  58. ↑ Lee, Timothy B. (24 May 2016). "Ethereum, explained: why Bitcoin's stranger cousin is now worth $1 billion". Vox. Retrieved 25 May 2016.
  59. ↑ Dabek, Daniel (29 Jul 2016). "Ethereum Classic Brings War To The Cryptocurrency Exchanges". CoinIdol. Retrieved 29 Jul 2016.
  60. ↑ Vigna, Paul (1 August 2016). "The Great Digital-Currency Debate: 'New' Ethereum Vs. Ethereum 'Classic'". The Wall Street Journal: Moneybeat. Retrieved 4 August 2016.
  61. ↑ https://www.cryptocoinsnews.com/ethereum-classic-hardforks-successfully/

External links

This article is issued from Wikipedia - version of the 12/4/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.