Blockchain is the technology that powers Bitcoin, allowing for a decentralized digital currency. Ethereum builds on this concept by enabling decentralized applications and smart contracts to be built and run on its blockchain. In Ethereum, smart contracts are written in the Solidity programming language and deployed to the Ethereum Virtual Machine, where they can store data and transact in the native cryptocurrency, Ether. Developers must be careful when writing smart contracts due to the potential for bugs to have costly consequences.

1. Blockchain for Developers

2. Blockchain
• Have you heard of Bitcoin?
• Who hasn’t.
• Well, blockchain is the technology powering the Bitcoin.

3. The Problem Domain
• We want a safe place to store our (virtual) money.
• We want anonymity.
• We want the platform to be smart (i.e., no intermediaries).
• Blockchain is the enabler.

4. Blockchain & Bitcoin
• The machines that constitute the blockchain network are called:
nodes.
• The nodes are anonymous.
• The “ledger’ of the transactions is replicated.
• Each node has a copy.
• Wait, transactions?

5. Have an Address
• So, we can generate a private key to some virtual wallet
address.
• No chance of collision.
• A transaction is a money transfer.

6. Adding a Block to the Chain
• In order to add transaction to the chain, a node needs to create
the next block containing that transaction (and probably some
more).
• Block size is cupped at 1mb.

7. Hashes
• In order to add a new block, the node (miner) has to solve a
difficult problem.
• Find a hash that includes the transactions, fees and the
previous block reference.
• Difficulty is dynamic and tries to make a new block a 10 minutes
task.

8. Miners
• Miners are fully autonomous and can even create empty blocks
(only the ”new block” fee).
• The ”source of truth” is the longest blockchain visible by the
majority of the nodes.

9. Not Only Currency
• The blockchain technology can be used for more things than
virtual currency:
• Smart Contracts.
• Source of Truth.
• Anonymity.

10. Ethereum
• The main purpose of Bitcoin is to leverage the blockchain
technology for safe and visible ownership of cryptocurrency
along with an online transaction platform.
• The main purpose behind ethereum is to run a decentralized
application.
• Application? Over blockchain?

11. Ethereum
• The cryptocurrency is called: Ether.
• Every node in the network runs the EVM (Ethereum Virtual
Machine).
• The consensus mechanism in Ethereum.
• Implementations are available in many programming
languages.

12. EVM
• Turing complete.
• The EVM specification is low-level.
• There are many high-level languages that compile into EVM
bytecode.
• One of the popular ones is: solidity.

13. Gwei and Gas
• Gwei is a 1 billionth (10-9) of Ether (ETH).
• A transaction fee is: (Gas consumed * Gas price).
• Gas prices can be checked at: https://ethgasstation.info/
• Note that the Gas consumed “per-line” is constant.
• “Gas consumed” for a simple transaction is: 21,000 (Gwei).

14. Smart Contracts - Solidity
contract Example1 {
uint age;
function setAge(uint x) public { age = x; }
function getAge() public view returns (uint) {
return age;
}
}

15. Discussion
• A very simple contract.
• Actually no contract at all.
• Everyone can change age.
• Though, history will be public and visible.
• Let’s see Gas…

16. Auction (Solidity by Example)
contract SimpleAuction {
address public beneficiary;
uint public auctionEnd;
address public highestBidder;
uint public highestBid;
// Allowed withdrawals of previous bids
mapping(address => uint) pendingReturns;
// Set to true at the end, disallows any change
bool ended;
event HighestBidIncreased(address bidder, uint amount);
event AuctionEnded(address winner, uint amount);

17. Discussion
• A getter function is generated for public fields.
• The address type is a built-in type allows for holding Ethereum
addresses.
• Supports the following members:
• balance, transfer().
• Some low-level methods (call, delegatecall, callcode).

18. Auctionconstructor( uint _biddingTime, address _beneficiary ) public {
beneficiary = _beneficiary;
auctionEnd = now + _biddingTime;
}
function bid() public payable {
require( now <= auctionEnd, "Auction already ended." );
require( msg.value > highestBid, "There already is a higher bid." );
if (highestBid != 0) {
pendingReturns[highestBidder] += highestBid;
}
highestBidder = msg.sender;
highestBid = msg.value;
emit HighestBidIncreased(msg.sender, msg.value);
}

19. Discussion
• The bid function is: payable.
• A keyword in Solidity.
• You can send ether to a payable function.
• Sending ether to non-payable functions, will invoke the (you
should provide) anonymous payable fallback function.

20. Discussion
• Require accepts a condition and an error message.
• If the condition is not met, undo all state changes and return the
second argument.
• Remaining gas will be refunded to the caller.

21. Auction
function withdraw() public returns (bool) {
uint amount = pendingReturns[msg.sender];
if (amount > 0) {
pendingReturns[msg.sender] = 0;
if (!msg.sender.send(amount)) {
pendingReturns[msg.sender] = amount;
return false;
}
}
return true;
}
function auctionEnd() public {
require(now >= auctionEnd, "Auction not yet ended.");
require(!ended, "auctionEnd has already been called.");
ended = true;
emit AuctionEnded(highestBidder, highestBid);
beneficiary.transfer(highestBid);
}

22. Ethereum Fork
• DAO (Decentrelized Autonomous Organization) was
crowdfunded as a form of venture capital fund.
• Not tied to any government.
• Launched at the end of April 2016.
• By may 2016 had an ether value of over 150 million $.
• On June 17 2016, a hacker managed to take advantage of a
vulnerability and took 11.5 million ether.

23. The Fork
• Caused a big debate whether to do something about it.
• Caused a hard fork of the Ethereum blockchain.
• Classic Ethereum incorporated the hack with Ethereum
returned the amount to DAO.

24. The Fork
• A hard fork is not always possible.
• In the case of the DAO attack, due to the nature of the smart
contract, the money was put in a DAO child account for 28
days.
• Allowing for an hard fork.
• This was not the case for several other attacks.

25. Security
• What does it mean for us?
• Bugs are very costly in smart contracts.
• Not your average “where is my button bug”.

26. Best Practices
• Mark calls to untrusted contracts.
• Check for failures in send() invocations.
• Assume that participants may not cooperate.
• E.g., consider a paper, scissors, rock game.

27. Ecosystem
• Remix – online IDE & compiler.
• Embark – JS based for doing TDD with smart contracts.
• Solidity Standard Library – a standard library?
• Collection Framework.
• Truffle – Environment for developing and testing smart
contracts.