Intro to smart contract on blockchain en
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smart contract? smart contract on blockchain? what's the possible challenge?
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Intro to smart contract on blockchain en
- 2. CONTRACT • What’s a contract? • voluntary arrangement between two or more parties • legally binding agreement • buying, selling, renting, leasing, insurance, investment, etc. • actively or inactively perform
- 4. • How to perform : self-enforcing , self executing • preliminary: terms matched • “SMART”? How? • Smart Contract in real-life： • vending machine • U-bike, on-line gambling • what’s the difference between smart contract and automated service? “SMART” CONTRACT
- 5. smart contract on blockchain
- 6. • What differences does it make? • value of Blockchain • whom to trust? • a person? • a company? https://en.wikipedia.org/wiki/Financial_crisis_of_2007–08 • government? https://en.wikipedia.org/wiki/Watergate_scandal • or program and mathematics? • its totally up to you • reach an agreement with untrustful party smart contract on blockchain
- 7. • https://www.thenewslens.com/article/11796 • a washing machine that can buy detergent itself if needed • without blockchain • cash flow : • online payment -> companies that sells detergent -> transportation companies • what’s the cost? • time, efforts on checking status and verify • what if something went wrong? • how long does it take to find out the problem? • who will find out the problem? • how long do I have to wait? smart contract on blockchain
- 8. • https://www.thenewslens.com/article/11796 • a washing machine that can buy detergent itself if needed • with blockchain • cash flow : • online payment -> companies that sells detergent -> transportation companies • what’s the cost? • transaction fee • what if something went wrong? • how long does it take to find out the problem? • who will find out the problem? • how long do I have to wait? smart contract on blockchain
- 10. • IOT • a device connecting to Internet? • machine to machine • how does it make sure it is not talking to a malicious node? • can try • how to make sure what it says is true? • share same information • distributed? • can an IOT device provide such capability in its storage unit? • decentralized? BLOCKCHAIN + IOT?
- 11. • main problems in IOT • Security • hardware resource BLOCKCHAIN + IOT?
- 12. CHALLENGE
- 13. CHALLENGE • External Information • Liquidity • has no control beyond ledgers • say you start a bet on tomorrow’s game score… • how do you provide the score to smart contract? • fetch the source from outside? • which source to trust? • can everyone fetch from the same source? • will it expire? disappear? change from time to time? • for now, smart contracts on blockchain can not fetch external information itself • provided by third party
- 14. CHALLENGE • External Information • Liquidity • has no control beyond ledgers • suppose you start an insurance contract with insurance company, is the money you pay monthly going to stay in there indefinitely? • no, like deposit in a bank, the company will make the best out of the money which means the money will only be there when something happened… • then, how can the terms in smart contract be enforced?
- 15. CHALLENGE • External Information • Liquidity • has no control beyond ledgers • How do you enforce in the real world? probably by litigation • but how is smart contract different from legacy contract?
- 17. Ethereum smart contract • Turing Complete • conditional branching • loop • ability to change arbitrary amount of memory
- 18. Ethereum smart contract • Bitcoin • Turing incompleteness • OP_IF, OP_NOTIF, OP_ELSE, OP_ENDIF • stateless • stack-based language • no loop • made purposely • prevent costly and infinite computation
- 19. Ethereum smart contract • Turing Complete • conditional branching • loop • ability to change arbitrary amount of memory • powerful • how to deal with malicious code, e.g. infinite loop? • gas • each operation has a price(gas) • pay for gas where user decides how much to pay per unit gas • pay with ether
- 20. Ethereum smart contract • How does it work? • 1. write your contract
- 21. Ethereum smart contract • How does it work? • 1. write your contract • 2. compile it to byte code
- 22. Ethereum smart contract • How does it work? • 1. write your contract • 2. compile it to byte code • 3. broadcasted and mined
- 23. Ethereum smart contract • How does it work? • 1. write your contract • 2. compile it to byte code • 3. broadcasted and mined • 4. invoke transaction
- 24. Ethereum smart contract • contract language • Serpent • python-like • Solidity • javascript-like
- 25. Ethereum smart contract • How does it work? • 1. write your contract • 2. compile it to byte code • 3. broadcasted and mined • 4. invoke transaction https://ethereum.github.io/browser-solidity/ https://github.com/ethereum/go- ethereum/wiki/Building-Ethereum https://github.com/ethereum/mist/releases
- 26. living example : DAO
- 27. living example : DAO • Decentralized Autonomous Organization • by slock.it • crowdfunding • vote by your share • profit by your share • child DAO • to prevent abuse of majority voting
- 28. living example : DAO • Recursive calling vulnerability • propose a split -> execute the split -> withdraw • propose a split -> execute the split -> propose a split -> execute the split -> withdraw
- 29. living example : DAO • function splitDAO problem1 problem2
- 30. living example : DAO • function withdrawRewardFor problem1
- 31. living example : DAO • function payOut problem1 • address.call.value(amount) • supply with enough gas • if address refers to a contract, it triggers fallback function • do what whatever you want as long as enough gas remaining • call to splitDAO again in fallback function
- 32. living example : DAO • function splitDAO problem2 • cleans up his/her balance after sending the money
- 33. living example : DAO • counter measure : • use address.send(amount) • 2300 gas • don’t execute address.call.value(amount) to untrusted code • limit gas in address.call.value(amount) • address.call.gas(gas_amount).value(amount) • cleans up the balance before sending money • then check if sending succed, if not ,rollback
- 34. living example : DAO • what happens after? • votes for hard fork • choose to stay, becomes ETC • choose to fork, becomes ETH • Ethereum foundation, token holders, immutability believers • too much money to fail? lawsuits? • what do you believe?