introduction to blockchain - lecture 3: from bitcoin to ...bitcoin blockchain: a revision a...

Introduction to BlockchainLecture 3: From Bitcoin to Ethereum

Ras Dwivedi

Indian Institute of Technology Kanpur

May 22, 2018

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Outline

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Bitcoin Blockchain: A Revision

A Decentralized Ledger

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Transactions

Figure: CaptionRas Dwivedi (Indian Institute of Technology Kanpur) Introduction to Blockchain May 22, 2018 4 / 32

Block

NonceHash of last block

Transaction 1

Transaction 2

Transaction 3

Transaction ....

Text

Figure: Caption

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Proof of work

Figure: Caption

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Mining rewards

Figure: Caption

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Longest chain

Figure: Blockchain

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Bitcoin: Advantages

Secure:transparencyno counterpart riskdecentralizedPrivacylow transaction cost

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Bitcoing is Awesome! But...

Block creation time is very high 10 mins/block

Block confirmation time is very high 60 mins/blockcan only do one function: Cryptocurrencyuses too much of energy: by 2020 electricity equivalent to entireDenmarkEnters...

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Bitcoing is Awesome! But...

Block creation time is very high 10 mins/blockBlock confirmation time is very high 60 mins/block

can only do one function: Cryptocurrencyuses too much of energy: by 2020 electricity equivalent to entireDenmarkEnters...

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Bitcoing is Awesome! But...

Block creation time is very high 10 mins/blockBlock confirmation time is very high 60 mins/blockcan only do one function: Cryptocurrency

uses too much of energy: by 2020 electricity equivalent to entireDenmarkEnters...

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Bitcoing is Awesome! But...

Block creation time is very high 10 mins/blockBlock confirmation time is very high 60 mins/blockcan only do one function: Cryptocurrencyuses too much of energy: by 2020 electricity equivalent to entireDenmarkEnters...

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Introducing Ethereum

A planetary scale computer build on blockchain technologypermision-lessTuring complete language

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Introducing Ethereum

A planetary scale computer build on blockchain technologypermision-lessTuring complete language

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Turing Machine

Figure: Caption

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Introducing Ethereum

A planetary scale computer build on blockchain technologypermision-lessTuring complete language

Begins the era of Decentralized app : Program that can run withoutfailure, without any downtime, censorship, fraud or third party inference

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Introducing Ethereum

A planetary scale computer build on blockchain technologypermision-lessTuring complete languageBegins the era of Decentralized app

: Program that can run withoutfailure, without any downtime, censorship, fraud or third party inference

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Introducing Ethereum

A planetary scale computer build on blockchain technologypermision-lessTuring complete languageBegins the era of Decentralized app : Program that can run withoutfailure, without any downtime, censorship, fraud or third party inference

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EVM: Ethereum Virtual Machine

Ethereum Blockchain isBlockchain with built in programming languagedecentralizedmassive database, where the current state of every account isstored EVM handles internal state and computationComputationis paid in Ether, per computation stepeach account object have:Its own internal statehave 32 byte key/value called storageCan call or send messages to other node

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Bitcoin vs Ethereum

EthereumBitcoin

Figure: Bitcoin Vs EthereumRas Dwivedi (Indian Institute of Technology Kanpur) Introduction to Blockchain May 22, 2018 15 / 32

Basics of Ethereum

Ether: the underlying cryptocurrency of EthereumGas: Gas is a basic unit of computationSmart contract:

Pre-written logic (code)

stored and replicated on blockchainself executing by running the codecan update blockchaincan do transfer of assets,run code to make payment

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Basics of Ethereum

Ether: the underlying cryptocurrency of EthereumGas: Gas is a basic unit of computationSmart contract:

Pre-written logic (code)stored and replicated on blockchain

self executing by running the codecan update blockchaincan do transfer of assets,run code to make payment

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Basics of Ethereum

Ether: the underlying cryptocurrency of EthereumGas: Gas is a basic unit of computationSmart contract:

Pre-written logic (code)stored and replicated on blockchainself executing by running the code

can update blockchaincan do transfer of assets,run code to make payment

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Basics of Ethereum

Ether: the underlying cryptocurrency of EthereumGas: Gas is a basic unit of computationSmart contract:

Pre-written logic (code)stored and replicated on blockchainself executing by running the codecan update blockchaincan do transfer of assets,run code to make payment

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Account types

Externally Owned AccountsContract Accounts

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Externally owned Accounts

Has ether Balance

Can send transactions (Ether transfer or trigger Contract code)Is controlled by private keyshas no associated code

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Externally owned Accounts

Has ether BalanceCan send transactions

(Ether transfer or trigger Contract code)Is controlled by private keyshas no associated code

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Externally owned Accounts

Has ether BalanceCan send transactions (Ether transfer or trigger Contract code)Is controlled by private keyshas no associated code

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Contract Accounts

Has associated Ether balanceHas associated codecode execution is triggered by transaction or messages received fromother accountscan execute code of arbitrary complexity (Turing Completeness) andmanipulate data in blockchain

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Transaction

Contains:receipt of the messagesignatureValue: amount of wei to be transferred from sender to recipientoption data field: which contains message to be send to recipientStartgas value:representing the maximum number of computationalsteps the transaction execution is allowed to take

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Message

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Mist

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Mist: Introduction

Mist Ethereum wallet is a Desktop hybrid application which is bothEthereum node and client. Aim: to install mist and run a Faucet account

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Discover MistDownload, install and start mist. You should see the following

Figure: Mist

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Mistsynchronization to the main net would take a lot of the time, so youshould switch to the testnet

Figure: Testnet

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Mist

Figure: CaptionRas Dwivedi (Indian Institute of Technology Kanpur) Introduction to Blockchain May 22, 2018 26 / 32

MistAnd then you’ll see Mist syncing with test net

Figure: TestnetRas Dwivedi (Indian Institute of Technology Kanpur) Introduction to Blockchain May 22, 2018 27 / 32

MistLets click on launch application

Figure: Caption

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MistCreate new account

Figure: Caption

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Mist

Figure: Caption

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Mist

Figure: Caption

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Bibliography

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