David McNeal

Ethereum Guide Key Points Blockchain: Ethereum Classification: Cryptocurrency Function: Dapps & smart contract platform Project Status: ongoing Circulating Supply: 100,652,883.16 Total Supply: TBD Market cap: $42,557,038,458 USD (6,944,263 BTC) Exchanges: Top 5 Consensus Algorithm: proof-of-work (POW) shifting to Casper proof-of-stake (POS) ICO: July 23, 2014 - Sept 2, 2014 Website: https://ethereum.org/ Whitepaper: https://github.com/ethereum/wiki/wiki/White-Paper Coinmarketcap: https://coinmarketcap.com/currencies/ethereum/ Points of Confidence: Decentralized application platform Creates new internet infrastructure Launchpad for internet startups No need to trust a middleman Self-executing smart contracts Disrupts centralized systems Promotes democratic corporate structure Risks: Many tokens distributed through Initial Coin Offerings (ICO) violate U.S. Securities Law Future hard forks could have unforeseen consequences Possible long-term security holes of fundamental flaws might be discovered CASPER development expected to take another year or two -), not guaranteed to work. Sharding development expected to take up to 3 more years (2021), not guaranteed to work The official Ethereum Wallet is highly recommended, but some people have issues installing & syncing it. Trust messages and random links exist. Scams and phishing sites and malicious links exist. Beginner Tips Verify and Be skeptical. Always back up your private key in a separate location, like a piece of paper or a USB drive. Avoid cloud storage Set up two-factor authentication. Take your time Ask questions Ask for clarification Reach out for help Read the instructions Read the warnings A copy of the first roadmap posted on Ethereum.org on July 23, 2014 History Development began in 2013, with British programmer Dr. Gavin James Woods, when a mutual friend introduced him to 19-year-old programmer and writer for Bitcoin magazine Vitalik Buterin. Ethereum launched on July 23, 2014, by founders Gavin Wood and Vitalik Buterin, along helped by many other bright-minded enthusiasts. The Ethereum network allows users to code "smart contracts" that can execute automatically from any computer running the Ethereum software for an exchange in the network's currency, "ether," creating one massive distributed computer for hire. Ethereum was defined initially by Buterin when he published the Nov. 2013 white paper titled “next generation smart contract & Decentralized Applications (Dapps) platform." Gavin Wood later published the first formal specification of a blockchain protocol, in April 2014, the technical Yellow Paper titled "Ethereum: A Secure Decentralised Generalised Transaction Ledger." Both, the Whitepaper and the http://gavwood.com/paper.pdfYellowpaper have been revised from their original versions. Gavin remained on the Ethereum Project as CTO for another 18-24 months. He describes his involvement with Ethereum as: "Having founded Ethereum with Vitalik, I coded the first functional implementation of Ethereum released as "PoC-1" in late January 2014, invented the Solidity contract language and wrote the Yellow Paper, the first formal specification of any blockchain protocol and one of the key ways Ethereum distinguishes itself from other blockchain-based systems. My original ideas for a decentralized web date back to early 2013, but my first post on the topic was in April 2014, later followed by a less-techy version." - http://gavwood.com/ The World Computer The goal for Ethereum is to create and connect a network of thousands of decentralized applications (Dapps) and smart contracts, on one platform. A Dapp is a blockchain program built atop the Ethereum’s blockchain and runs on the peer to peer network. Ethereum is a decentralized platform that runs smart contracts: applications that run precisely as programmed with no possibility of downtime, fraud or third-party interference. Ethereum works the way the Internet was supposed to work: The vision of a censorship-proof ‘world computer' that anyone can program, paying exclusively for what they use and nothing more, is now a reality. Every app must run on a node to stay operational, by combining thousands of nodes Ethereum could become a “world computer." In its beginning, the "State of the Dapp" website operated on EtherCast.com. The image below shows us a list of the first Dapps to exist on Ethereum from.ethercast.com on December 21, 2015 You can explore the comprehensive directory of Dapps on “State of the ÐApps” — A not-for-profit website that categorizes and showcases developed Dapp projects, built on the Ethereum Blockchain. Smart contracts A term coined in 1994 by Nick Szabo, smart contracts are pre-written logic computer programs that can be executed the blockchain. A Smart contract generates new tokens when receiving "Ether" (or ETH), the cryptocurrency of Ethereum. The programming is all done inside a "command prompt like" digital environment called the Ethereum Virtual Machine (EVM) — the Ethereum blockchain developers platform. EVM is a Turing complete digital environment. All parties agree to a set of pre-defined terms and execution conditions. They are executed by transferring the value between the contract signing parties when the transaction is triggered. One or more specific events trigger the transaction without relying on a central authority. Implementing smart contracts via Ethereum makes blockchain technology more efficient, compared to the difficulties of creating a new blockchain technology. Since its launch, a clear majority of developers and businesses have written have written smart contracts on Ethereum instead of developing a new blockchain of their own. “Trustless” Technology Smart contracts enable companies to do business with no to trust each other. This “trustless” system reduces friction in business; it introduces a new way of proving ownership right deeds and titles; also, smart contracts can simplify standard arrangements in all from complex corporate dividend structures to a ‌ cryptocurrency transaction. ’ Ether Ethereum is the platform for Dapps and smart contracts. Ether is the fuel that sustains the added benefit of the principle design: a revolutionary concept to develop decentralized applications remotely over a distributed network. Developers need to spend Ether if they want to build and deploy Dapps that interact with users and smart contracts on the blockchain. If a script pays for execution, then it can run atop Ethereum. Ethereum uses Ether as its tradeable cryptocurrency; Beyond a tradeable cryptocurrency, developers also use Ether to incentivize new startups and give an accessible source of funds for them to develop and support Decentralized Applications (Dapps) into a robust ecosystem. ICO Initial Coin Offering (ICO), is an “investment vehicle” for raising capital from investors by selling a capped supply of newly issued cryptocurrencies in exchange for legal tender or another cryptocurrency. The creation of Ethereum sparked a cataclysmic chain of events transforming the ICOs market from an online community of bitcoin miners, hackers, and developers — to an interconnected global ecosystem of products and services. ICOs sell cryptocurrencies that may represent a right to ownership of the project's assets or royalties. Sometimes, tokens purchased in an ICO represent a share of the control in the company itself, which makes is much like an Initial Public Offering (IPO), except that an IPO is regulated and restricted, so it makes it difficult for an early-stage company to raise enough money to fund its operations. ICOs have evolved tremendously as a result from the demands for innovative technology of an open and online marketplace, being met by a new class of highly driven individuals putting together their skillsets, resources, ideas, and organizing them into operational businesses with a need for a simple, lean, and efficient platform to raise money from the public freely, without restricting participation to accredited investors only. Some tokens possess a quality that makes them desirable for practical purposes other than a profitable investment. A utility token is designed for general support of the processes of a digital software or service. These cryptocurrencies are similar to real-world cases we see every day, such as gas reward points, in-store credits, and cash back rewards. Ethereums' founders self-sponsored an ICO event which opened to investors on July 23, 2014, and ended after 42-days of remarkable success on Sept. 2, 2014. Over 7 million ether (ETH) sold during the first 12 hours. The equivalent value was over 3,700 BTC or $2.3 million. More than $18 million worth of Bitcoins. In return, over 60 million Ether tokens were distributed. Now, Ethereum is a crowdfunding platform for anyone to sponsor create a token and sponsor their own ICO. It offers significant promise for new startups in the cryptocurrency space as means of quicker and easier capital raise. Ethereum Use Cases All-time ICO list of lists http://www.tokensalecalendar.com/ https://www.smithandcrown.com/icos/ https://www.reddit.com/r/icocrypto/ http://icorating.com/ https://icoo.io/ http://www.icocountdown.com/ http://www.coinschedule.com/ https://tokenmarket.net/ https://www.ico-list.com/ Ethereum Blockchain Technology What does the Ethereum client software do? You can use it to: ●Connect to the Ethereum network ●Explore Ethereum’s blockchain ●Create new transactions and smart contracts ●Run smart contracts ●Mine for new blocks Use Cases Satellite synchronization During access verification, users and satellites can perform the mutual authentication through their public and private keys, and a user’s authority is checked against his token. Meanwhile, the authentication logs are recorded in blocks which would merge and distributed between satellites merged and distributed between satellites. Clinical Trials Smart contracts can improve clinical trials. They can streamline processes for trials, improve access to cross-institution data, and can increase confidence in patient privacy. Auto Insurance A smart contract can record the policy, driving record and driver reports, allowing Internet of Things-equipped vehicles to execute claims shortly after an accident. Supply Chain Smart contracts can provide real-time visibility for every step in a supply chain. Internet of Things devices can record each step as a product moves from a factory floor to the store shelves. Land Title Recording Smart contracts that facilitate property transfers can deter fraud, improve transaction transparency and efficiency, and strengthen confidence in identity. Mortgages The smart contract can automatically process payment and release liens from land records when the loan is paid. Financial Data Recording Smart contracts allow for consistent financial data across organizations, improving financial reporting and reducing auditing costs. Derivatives Smart contracts can streamline post-trade processes, removing duplicative processes executed by each counterparty for verifying trades and conducting trade events. Trade Finance Smart contracts can streamline international transfers of goods via fast Letter of Credit and trade payment initiation while enabling greater liquidity of financial assets. Records Smart contracts can digitize the Uniform Commercial Code (UCC) filing and automate their renewal and release processes. 4 Phases of Ethereum Development Each stage brings new features and improves the user-experience and security of the platform while boosting Ethereum’s ability to scale. The launch Ethereum development is separated into 4 milestone phases to plan the future of the Ethereum blockchain architecture and to progress swiftly. You can locate the initial roadmap in English here: Ethereum Launch Process. We have outlined the four significant milestones for you: Olympic pre-release (Testnet, Chain #0 - May 9, 2015) Olympic rewarded people to test the limits of the Ethereum blockchain during the pre-release period, spamming the network with transactions and doing crazy things with the state so the core developers could see how the network held up during high levels of load. Phase 1: Frontier public release (Ethereum Genesis, Chain #1 - July 30, 2015) Frontier was essentially a beta release that allowed developers to learn, experiment, and build Ethereum decentralized apps and tools. Frontier is the Ethereum network in its most minimalistic form. An interface in a command line for merging Ethers and for uploading and executing Ether Contracts. Miners constructed and run their mining rigs. With the Frontier release, individuals could test Dapps in the early stages and buy Ether to upload their program in Ethereum. Phase 2: Homestead Release (Block #1,150,000 - March 14, 2016) Homestead was the second major version release of the Ethereum platform. It included several protocol changes and a networking change that gave Ethereum the ability to further network upgrades. The Homestead Phase was initiated after Frontier was extensively tested and classified by the core developers as stable and safe. In this stage, Ethereum was deemed "safe." From the Homestead release, the initial projects in Ethereum were developed and operating. DAO Fork (Block #1,920,000 - July 20, 2016) DoS Fork (Block #2,463,000 - October 18, 2016) Spurious Dragon (Block #2,675,000 - November 22, 2016) Phase 3: Metropolis Release (ongoing) The Metropolis phase eas initiated as soon as an official interface was delivered for technically inexperienced users. Similarly, Mist was provided in and its dapp store. Metropolis included functional programs created to testify to the power of Ethereum network. Metropolis consists of two stages: 1. Byzantium 2. Constantinople Phase 4: Serenity Release Serenity is the fourth and definitive stage of Ethereum. Because PoW (Proof of Work) involves a tremendous waste of energy, the developers aim to find a substitute in this phase. The Ethereum Network is to be moved from PoW to PoS (Proof of Stake). Besides this, the chain should be quicker, more efficient, simple for beginners and more resilient against the interruption of mining capacity. Why Proof of Stake? Two motivations for the planned switch to Proof of Stake: Ethereum developers and researchers believe that consensus algorithms based on Proof of Stake (PoS) can provide more security for resource expenditure, compared to Proof of Work (PoW). Also, they believe that a new design called "Casper" resolves the critical issues of the "state of the art" in Proof of Stake design, including imperfect decentralization and vulnerability to certain types of attacks and other economic and performance considerations. Casper Mostly it's a mixed PoW, PoS algorithm which its purpose is to arrive one day to a full PoS implementation. By using PoS consensus algorithms, you eliminate the mining concept. Then, according to Vitalik Buterin, the block time can decrease till arriving at even 5 - 7s. Sharding Similar to Bitcoin Lightning Network, plasma adds a second layer of off-chain branches to the main Ethereum blockchain to process high-volume smart contract protocols more quickly. In more advanced forms of sharding, cross-shard communication capability, where transactions on one shard can trigger events on other shards, is also included. You can see the benefits of this structure. The number of nodes that process every single transaction would be reduced, and increase overall throughput. Plasma: Scalable Autonomous Smart Contracts Plasma is the proposed groundwork for enforced and incentivized execution of smart contracts. Theoretically scalable up to a potential of billions of transactions per second, these smart contracts are incentivized to continue operation autonomously via network transaction fees, which is ultimately reliant upon the underlying blockchain to enforce transactional state transitions. Ethereum Foundation is donating lots of $ to incentivize the research on sharding and plasma. Other protocols built on Ethereum What is Loom Network? Built on top of Ethereum, Loom allows developers to run large-scale decentralized applications. It is a network of DPoS sidechains, which provides for highly-scalable games and user-facing DApps while still being backed by the security of Ethereum. Like how Filecoin tokenized disk space, Loom aims to be the tokenized application protocol of the new decentralized web. DPoS = Delegated Proof of Stake A layer-two blockchain that uses Ethereum as its base-layer. Running each DApp on its sidechain to Ethereum has several benefits, but most important: 1. DAppChains can use alternative consensus rulesets (like DPoS) that optimize for high scalability. 2. DAppChains: Each DApp On Its Sidechain allow for scalable blockchain games and DApps with the security of Ethereum mainnet. Like EOS on Ethereum. PoA=Proof of Authority PoA is an alternative consensus mechanism, which does not depend on the nodes solving arbitrarily tricky mathematical puzzles, but instead uses a set of "authorities" - nodes explicitly allowed to create new blocks and secure the blockchain. Ethereum testnet (Kovan) runs on PoA consensus algorithm. Read here to understand PoA better. Oracles About input of "real world data" to Ethereum (stock prices, weather measurements, match results, etc.), solutions are centralized (i.e., a server grabs data from a known set of sources and relays the result to Ethereum, possibly as a response to an EVM event). Ethereum wallet When you’re searching the web for the best Ethereum wallet, look for these features: Security. Does it come with two-factor authentication? Are there processes are in place to allow for secure backup and recovery? Private keys. Look for a wallet that allows you to keep control of your private key, as this will allow you to protect your ETH holdings. Ongoing development. Research the customer support staff. Do they have negative reviews? What do they say? When was the last patch released? Ease of use. Cryptocurrency wallets can sometimes confuse a beginner, so look for a wallet with features that meet the needs of your experience. Compatibility. Can you store it on your flash or hard drive? Can you access your wallet on the devices you use to manage cryptocurrency? Support for multiple currencies. Will you need to store other crypto coins or tokens? Which ones? Does the wallet support them? Paper Wallet ethaddress Security, privacy, cheap cold storage Doesn’t support Ethereum Classic, inconvenient Hardware wallets (USB Flash Drive, etc.) TREZOR Great security, stores a wide range of crypto, quick setup and easy use High cost Ledger Nano S Security, ease of use, stores many coins and tokens High cost, long shipping delays at the time of writing KeepKey Security, multi-currency support It’s not cheap, relatively new company Mycelium Simple and convenient access, retain your private key, interact with smart contracts Security risks Exodus Easy access, stores multiple Cryptocurrencies Private keys are not kept in your control, security risks is when storing on an exchange Electrum Easy access to the Ethereum network and Dapps, user-friendly interface, private key protection Not as safe as hardware wallets can be a little confusing at first Desktop Wallets Jaxx Stores multiple cryptocurrencies, convenience, user-friendliness, retaining control of private keys Some security concerns Coinomi Stores multiple crypto assets, ease of use, retaining private keys No iOS app (yet) Competition Amazon Web Service On December 6, 2017, Amazon Web Services (AWS) announced a partnership with R3 to allow the company’s “Corda” platform on the AWS. Corda enables users to deploy Dapps onto the AWS platform. R3 sees Ethereum as one of its biggest competitors. Compared to R3, Ethereum generates $1M more revenue as reported by Owler. Hyperledger Fabric Another development in close competition with Ethereum is The Linux Foundation introduced Hyperledger, Fabric, is the groundwork for developing applications with a modular architecture, The main difference between Ethereum and Fabric is in their consensus algorithms The Team: Ming Chan Director, Council Member An alumna of Massachusetts Institute of Technology, where she studied Computer Science and Media Arts & Sciences Vitalik Buterin Creator of Ethereum He cofounded Bitcoin Magazine in September 2011, and after two and a half years looking at what the existing blockchain technology and applications offered, wrote the Ethereum white paper in November 2013. Jeffrey Wilcke Technical Steering Group Jeff is one founder of Ethereum. He started the first implementation of Ethereum using the Go programming language in 2013 and has been the Go team lead and head developer ever since. Market Capitalization Whitepaper: Get more information ICO Round: Round 1 Raised Capital: 18.4m USD Total Coins created at the sale: 60 Million ICO Launch: 12. July 23 2014 ICO Finish: 15. Sept 2 2014 ICO Tradable on Exchanges since 30. July 2015 Max Supply: Ether creation is capped at no over 18 million per year. This means the relative inflation is decreased every year. Rewards: 5 Ether is created after each block (~15 seconds) 2-3 ether is sometimes sent to another miner if they also found a solution, but it wasn't included. Ethereum London London, GBR Ethereum Berlin Berlin, DEU Ethereum Amsterdam Amsterdam, NLD Top 5 Exchanges Overall 1 CoinEx ETH/BTC $115,426,000 $-% 2 Binance ETH/USDT $76,155,900 $-% 3 OKEx ETH/USDT $63,006,100 $-% 4 Huobi ETH/USDT $55,004,700 $-% 5 Bitfinex ETH/USD $53,243,000 $-% Decentralized Exchanges (Mostly Eth assets) OasisDex EtherDelta for delta Index CryptoDerivatives Radex 0x Relayers: Paradox RadarRelay Ethfinex Recent News! According to https://etherbasics.com/the-basics/phases-of-ethereum/ Ethereum co-founder Joseph Lubin said that the Ethereum blockchain had entered phase two of its development. "Ethereum is moving into space where it can serve as the layer one trust system and built into Ethereum we'll have hundreds of thousands of transactions in the layer two systems, and we're going to see that ramified this year."