Mastering Ethereum : A Short Summarized Story

If you are procastinating to read this 320 Pages book due to time or any other reason, I will help you to grasp its concepts with my 14 parts blog series which will be summarized version to let you understand and revise quickly.

Join me in the race and lets get down to the rabbithole of Ethererum. Yuhuu...!!!

Lets start with Chapter 1 : What is Ethereum

What is Ethererum

Ethereum is an open source, globally decentralized computing infrastructure that executes programs called smart contracts.
It enables developers to build powerful dapps with built-in economic functions. While providing high availability, auditability, transparency, and neutrality, eliminates censorship.

Similarity with Bitcoin

=> peer-to-peer network
=> a Byzantine fault–tolerant
=> proof-of-work blockchain
=> digital signatures and hashes
=> a digital currency

Differences from Bitcoin

Bitcoin is a digital currency payment network i.e cryptocurrency application with limited scripting language. While Ethereum is Turing complete programmable blockchain that runs a virtual machine capable of executing complex code. Its currency Ether is intended as a utility currency to pay for use of the Ethereum platform as world computer.

Components of a Blockchain :

=> A peer-to-peer (P2P) network
=> Messages, in the form of transactions
=> A set of consensus rules for a valid state transition
=> A state machine that processes transactions
=> A chain of cryptographically secured blocks that acts as a ledger
=> A consensus algorithm that decentralizes control over the blockchain
=> Incentivization scheme such as block rewards

Term “blockchain” is just a shorthand reference to the combination of above technologies. Today, there are a huge variety of blockchains with very different properties but base technicality and specification remains same.

The Birth of Ethereum

With limited set of transaction types, data types, and sizes of data storage, it was hard to build a more freedom and flexibility project on top of Bitcoin because it needed additional off-chain layers, and that was against benefits of public blockchain. So new blockchain was only option.
Toward the end of 2013, Vitalik Buterin, a young programmer and Bitcoin enthusiast, proposed turing-complete contracts to replace the specialized contract language of Mastercoin(an overlay protocol that extended Bitcoin to offer rudimentary smart contracts). Mastercoin team was impressed but it didnt fit their dev roadmap.
In Dec 2013, he shared whitepaper of Ethererum: a Turing-complete, general-purpose blockchain. Andreas, Gavin Wood and few dozen people received it and helped evolving the proposal. Andreas helped in enforcing consensus rules on smart contract execution a much later. Dr. Gavin Wood was first to offer help to Vitalik. He had C++ programming skills and became Ethereum’s co-founder, codesigner, and CTO.
The main idea of Ethereum founders was to provide secure and decentralized programming environment to developers to program their broad variety of application without having to implement the underlying mechanisms of blockchain.
The founders worked for years, building and refining the vision. And on July 30, 2015, the first Ethereum block was mined.

Ethereum’s Four Stages of Development

Ethereum’s development was planned over four distinct stages with subreleases(“hard forks”) that were not backward compatible.

Main Development Stages : Frontier, Homestead, Metropolis,and Serenity.
Intermediate Hard Forks : Ice Age, DAO, Tangerine Whistle, Spurious Dragon, Byzantium, and Constantinople.

Name	Block Number	Description
Stage : Frontier Started on July 2015	Block #0	The initial stage of Ethereum
Hard Fork : Ice Age	Block #200,000	to motivate transition to PoS
Stage : Homestead Started from Mar 2016	Block #1,150,000	Second Stage of Ethererum
Hard Fork : DAO	Block #1,192,200	Ethereum and Ethereum Classic splits to reimburse DAO hack victims
Hard Fork : Tangerine Whistle	Block #2,463,000	DoS attack lead to Gas Calculation changes for some I/O heavy operations
Hard Fork : Spurious Dragon	Block #2,675,000	To address more DoS attack vectors and protect from replay attack mechanism
Stage : Metropolis Started from Oct 2017	Block #4,370,000	Byzantium and Constantinople were two hard forks planned for Metropolis

Metropolis will be followed by the final stage of Ethereum’s deployment, code‐named Serenity.

Ethereum: A General-Purpose Blockchain

Ethereum is also a distributed state machine like bitcoin. But instead of tracking only the state of currency ownership, Ethereum tracks the state transitions of a general-purpose data store as a key–value tuple just like RAM.

Just like most computers, Ethereum can load code into its state machine and run that code, storing the resulting state changes in its blockchain. Difference is Ethereum state changes are governed by the rules of consensus and the state is distributed globally.

Ethereum’s Components

Component	Description
P2P network	Ethereum runs on the Ethereum main network, which is addressable on TCP port 30303, and runs a protocol called ÐΞVp2p.
Consensus rules	Defined in the Yellow Paper
Transactions	Network messages that include sender, recipient, value, and data payload.
State machine	State transitions are processed by stack based EVM that executes bytecode. Programs are written in Solidity and compiled to bytecode for EVM exection
Data structures	Ethereum’s state is stored locally on each node as a database (usually Google’s LevelDB), which contains the transactions and system state in a serialized hashed data structure called a Merkle Patricia Tree.
Consensus algorithm	Ethereum uses Bitcoin’s consensus model, sequential single-signature blocks. Plans to move to a PoS weighted voting system, codenamed Casper.
Economic security	Ethereum currently uses a PoW algorithm called Ethash, but will move to PoS
Clients	Most prominent Ethererum Clients are Go-Ethereum (Geth) and Parity.

Arrival of "Gas"

Turing-complete systems can run in “infinite loops,” i.e program that does not terminate. Ethereum can’t predict if a smart contract will terminate, or how long it will run, without actually running it. Whether by accident or on purpose, a smart contract can be created such that it runs forever when a node attempts to validate it. This results into an infinite range of nasty, resource-hogging, memory-bloating, CPU-overheating cases that simply waste resources. This is effectively a DoS attack.

So Ethereum introduces a metering mechanism called gas. Each instruction has a predetermined cost in units of gas. Amount of gas has to be passed when a transaction triggers that sets the upper limit of what can be consumed running the smart contract. The EVM will terminate execution if the amount of gas consumed by computation exceeds the gas available in the transaction.

So, Gas is the mechanism Ethereum uses to allow Turing-complete computation while limiting the resources that any program can consume. Gas can only be purchased as part of a transaction, and can only be bought with ether.

From General-Purpose Blockchains to Decentralized Applications (DApps)

Ethereum’s vision expanded to become a platform for programming DApps.
DApps is meant to take the WWW to its next evolutionary stage, from centrally owned and managed applications, to applications built on decentralized peer-to peer protocols.

A DApp is composed of at least:

 - Smart contracts on a blockchain
 - A web frontend user interface.

In addition, many DApps include other decentralized components, such as:

 - A decentralized (P2P) storage protocol and platform
 - A decentralized (P2P) messaging protocol and platform

Ethereum’s Development Culture

Unlike Bitcoin, Ethereum develpment culture is focused on the future rather than the past i.e “move fast and break things.” A change is implemented, even if that breaks compatibility, or forcing clients to update leading to rapid innovation and evolution. That means You can’t simply “upgrade” your smart contracts. You must be prepared to deploy new ones, migrate users, apps, and funds, and start over.

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