State of Ethereum, and Mining

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  • 1. State of Ethereum And Mining
  • 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. ● Generalized cryptoledger ● Built-in programming language ● Create any feature that you want ● Also supports DACs/DAOs/DAs Ethereum
  • 4. ● Special type of account ● Has: ○ Code ○ Ether ○ Storage (key/value database) Contracts
  • 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. Name registry: Currency: Examples
  • 7. The Ethereum Blockchain
  • 8. Ethereum in 2014 ● Decentralized applications (Đapps) ● More than just money
  • 9. ● HTML/JS webpage, ETH JS API Đapps: contracts with GUIs
  • 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. ● Financial ○ Kickstarter (38 LoC) ○ Denny’s Lotto ● Academic Publishing ○ CryptoSwartz ● Governance ○ People’s Republic of ĐOUG ○ Project Eris ○ BitVote Third-Party Development
  • 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. What needs to be done (technical) ● EtherBrowser ○ Likely Chromium-based ● Efficiency upgrades ○ JIT compilation ● Security audits ● Light client implementation ● Mobile implementation
  • 14. What needs to be done (non-technical) ● Finalize pre-sale tasks ● CCRG formal setup ● Education resources ● Translation ● 960 more meetup groups?
  • 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. 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. ● 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. 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. 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. 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. Pools
  • 22. ● Bad argument: no, majority miner has aligned incentives ● Better argument: users can quit pools ○ Unknown: will they? Is centralization bad?
  • 23. ● Problem: centralized pools allow mining without validation ● Idea: protocol requires blockchain accesses ● Goal: make P2Pool economically viable Solution 1: force blockchain storage
  • 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. ● Original intent: mining decentralized, democratic ● Problem: specialized hardware ● Now: mining hardware all produced by a few centralized firms ASICs
  • 26. ● 25% of hashpower made in one factory in Shenzhen ● First floor: 25% of Litecoin hashpower How bad?
  • 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. The First Grand Equation
  • 29. ● Centralized maintenance, storage cheaper ● Decentralized energy free… up to a point ASIC Decentralization: The Argument
  • 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. ● 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. The Second Grand Equation ● Idea: use of computer hardware free… up to a point
  • 33. End