State of Ethereum
And Mining
● People want features
○ Issue coins
○ Decentralized exchange
○ Financial contracts
● Solution: feature coins
● Problem: w...
● Generalized cryptoledger
● Built-in programming language
● Create any feature that you want
● Also supports DACs/DAOs/DA...
● Special type of account
● Has:
○ Code
○ Ether
○ Storage (key/value database)
Contracts
● Idea: when a message is sent to a
contract, code executes
● Code can:
○ Read/write storage
○ Send ether
○ Send other mes...
Name registry: Currency:
Examples
The Ethereum Blockchain
Ethereum in 2014
● Decentralized applications (Đapps)
● More than just money
● HTML/JS webpage, ETH JS API
Đapps: contracts with GUIs
● Whitepaper
● Protocol fully implemented
● 4 clients (Go, C++, Py, Java)
● 2 clients compatible for 1900 blocks
● Serpent...
● Financial
○ Kickstarter (38 LoC)
○ Denny’s Lotto
● Academic Publishing
○ CryptoSwartz
● Governance
○ People’s Republic o...
Progress so far (non-technical)
● CCRG prelim (Toronto, Waterloo, Texas,
Nicosia)
● Regulatory (Swiss, almost US)
● Sale w...
What needs to be done (technical)
● EtherBrowser
○ Likely Chromium-based
● Efficiency upgrades
○ JIT compilation
● Securit...
What needs to be done (non-technical)
● Finalize pre-sale tasks
● CCRG formal setup
● Education resources
● Translation
● ...
Conclusion
● Ethereum at halfway point
● Current version theoretically near-
viable but buggy (eg. 2009 BTC)
● “Hard” work...
Decentralization, n. The security assumption that a
nineteen year old in Hangzhou and someone maybe in
the UK, and maybe n...
● I have 100 BTC
○ Tx 1 sends 100 BTC to A
○ Tx 2 sends 100 BTC to B
● Both are published, which one confirms?
● Correct a...
Mining
● Miners attempt to produce blocks
● Each block references previous block
● Block making function 1/1020
success ra...
51% Attacks
● Problem: one entity has >50% hashpower
● Attack 1: reverse transactions
● Attack 2: exclude others, monopoli...
Pools
● Mining is a lottery
● One ASIC has 15% chance of success
● Pools: mine for me, I pay you 0.00025 BTC
per block
● P...
Pools
● Bad argument: no, majority miner has
aligned incentives
● Better argument: users can quit pools
○ Unknown: will they?
Is...
● Problem: centralized pools allow mining
without validation
● Idea: protocol requires blockchain
accesses
● Goal: make P2...
● Problem: small pools have high variance
● Idea: users mine into multiple pools
simultaneously
● Goal: allow even small p...
● Original intent: mining decentralized,
democratic
● Problem: specialized hardware
● Now: mining hardware all produced by...
● 25% of hashpower made in one factory in Shenzhen
● First floor: 25% of Litecoin hashpower
How bad?
● Argument: CPU production very
centralized too
● Counterpoint: CPU usage and control still
local
● ASIC production now ce...
The First Grand Equation
● Centralized maintenance, storage cheaper
● Decentralized energy free… up to a point
ASIC Decentralization: The Argument
● 2011: Scrypt
○ Problem: memory-hard to verify
● 2013 Oct: Momentum
○ Problem: Pollard cycle finding algo
● 2013 Dec: Dag...
● Strategy: randomly generate a mining
function every block
● Idea: optimal ASIC for “any function” IS a
CPU
● Problem: ho...
The Second Grand Equation
● Idea: use of computer hardware free… up
to a point
End
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State of Ethereum, and Mining

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State of Ethereum, and Mining

  1. 1. State of Ethereum And Mining
  2. 2. ● People want features ○ Issue coins ○ Decentralized exchange ○ Financial contracts ● Solution: feature coins ● Problem: what if people want to do more? Cryptocurrency in 2013
  3. 3. ● Generalized cryptoledger ● Built-in programming language ● Create any feature that you want ● Also supports DACs/DAOs/DAs Ethereum
  4. 4. ● Special type of account ● Has: ○ Code ○ Ether ○ Storage (key/value database) Contracts
  5. 5. ● Idea: when a message is sent to a contract, code executes ● Code can: ○ Read/write storage ○ Send ether ○ Send other messages (ie. recursive VM) Contracts
  6. 6. Name registry: Currency: Examples
  7. 7. The Ethereum Blockchain
  8. 8. Ethereum in 2014 ● Decentralized applications (Đapps) ● More than just money
  9. 9. ● HTML/JS webpage, ETH JS API Đapps: contracts with GUIs
  10. 10. ● Whitepaper ● Protocol fully implemented ● 4 clients (Go, C++, Py, Java) ● 2 clients compatible for 1900 blocks ● Serpent, LLL, Mutan ● Basic browser ● Fully functional third-party dapps Progress so far (technical)
  11. 11. ● Financial ○ Kickstarter (38 LoC) ○ Denny’s Lotto ● Academic Publishing ○ CryptoSwartz ● Governance ○ People’s Republic of ĐOUG ○ Project Eris ○ BitVote Third-Party Development
  12. 12. Progress so far (non-technical) ● CCRG prelim (Toronto, Waterloo, Texas, Nicosia) ● Regulatory (Swiss, almost US) ● Sale website, cold storage policy (almost) ● 40+ meetup groups
  13. 13. What needs to be done (technical) ● EtherBrowser ○ Likely Chromium-based ● Efficiency upgrades ○ JIT compilation ● Security audits ● Light client implementation ● Mobile implementation
  14. 14. What needs to be done (non-technical) ● Finalize pre-sale tasks ● CCRG formal setup ● Education resources ● Translation ● 960 more meetup groups?
  15. 15. Conclusion ● Ethereum at halfway point ● Current version theoretically near- viable but buggy (eg. 2009 BTC) ● “Hard” work still remains (we’re only half-done…)
  16. 16. Decentralization, n. The security assumption that a nineteen year old in Hangzhou and someone maybe in the UK, and maybe not, have not yet decided to collude with each other. Mining
  17. 17. ● I have 100 BTC ○ Tx 1 sends 100 BTC to A ○ Tx 2 sends 100 BTC to B ● Both are published, which one confirms? ● Correct answer: the one that appears first ● Problem: need distributed timestamp ● Solution: blockchain Blockchain
  18. 18. Mining ● Miners attempt to produce blocks ● Each block references previous block ● Block making function 1/1020 success rate ● One random miner succeeds every 10 min ● Longest blockchain (one with most PoW) wins
  19. 19. 51% Attacks ● Problem: one entity has >50% hashpower ● Attack 1: reverse transactions ● Attack 2: exclude others, monopolize ○ Weaker version at 25%: selfish-mining ● Attack 3: censor transactions
  20. 20. Pools ● Mining is a lottery ● One ASIC has 15% chance of success ● Pools: mine for me, I pay you 0.00025 BTC per block ● Problem: pool centralization
  21. 21. Pools
  22. 22. ● Bad argument: no, majority miner has aligned incentives ● Better argument: users can quit pools ○ Unknown: will they? Is centralization bad?
  23. 23. ● Problem: centralized pools allow mining without validation ● Idea: protocol requires blockchain accesses ● Goal: make P2Pool economically viable Solution 1: force blockchain storage
  24. 24. ● Problem: small pools have high variance ● Idea: users mine into multiple pools simultaneously ● Goal: allow even small pools to fully absorb variance Solution 2: Multi-PPS
  25. 25. ● Original intent: mining decentralized, democratic ● Problem: specialized hardware ● Now: mining hardware all produced by a few centralized firms ASICs
  26. 26. ● 25% of hashpower made in one factory in Shenzhen ● First floor: 25% of Litecoin hashpower How bad?
  27. 27. ● Argument: CPU production very centralized too ● Counterpoint: CPU usage and control still local ● ASIC production now centralized, usage still decentralized ● Will this change? Is this a problem?
  28. 28. The First Grand Equation
  29. 29. ● Centralized maintenance, storage cheaper ● Decentralized energy free… up to a point ASIC Decentralization: The Argument
  30. 30. ● 2011: Scrypt ○ Problem: memory-hard to verify ● 2013 Oct: Momentum ○ Problem: Pollard cycle finding algo ● 2013 Dec: Dagger ○ Problem: shared memory ● Now: Cuckoo (length-42 cycles) Anti-ASIC 1: Memory-Hardness
  31. 31. ● Strategy: randomly generate a mining function every block ● Idea: optimal ASIC for “any function” IS a CPU ● Problem: how ● Problem 2: some specialization always possible ○ But: does that matter? Anti-ASIC 2: Generalized Computation
  32. 32. The Second Grand Equation ● Idea: use of computer hardware free… up to a point
  33. 33. End
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