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Ethereum Projects for Beginners

Chapter 1. Workflow Setup and Thinking Blockchain

Blockchains are the new fad in the word of cryptocurrency; we have witnessed the remarkably growing popularity of Bitcoins. Ethereum uses a technology similar to Bitcoin, and the coin that it trades in is known as ether. There is not much difference between the two except for smart contracts that are nothing but the codes that are written using the Ethereum Virtual Machine (EVM), which automates as well as executes agreements in an immutable ledger. We will get to know more about this later. To dive in further, first we are going to go over some use cases—they're very interesting. Next we will provide an overview of the Ethereum blockchain and blockchain in general. We will look at some of the benefits and limitations of blockchain. Then, we are going to get into setting up an efficient workflow so that we can get into further chapters without anything holding us back.

Topics that we'll be covering in this chapter are as follows:

Ethereum-based projects
An overview of blockchain and Ethereum
Benefits and limitations
Setting up an efficient workflow

Ethereum-based projects

Ethereum is like Bitcoin, but it's for code! It's the blockchain for smart contracts and it stores immutable code and logic in the blockchain. Immutable is a very important word here. That's pretty much all you need to know about Ethereum. So, what's possible right now? Let's have a look in the following sections.

Gnosis

Gnosis is market-driven forecasting technology. It is based on proven scientific research. It has its own platform known as the Gnosis platform and you can build your own platform on top of it. It basically makes trading predictions. And correct predictions are given the tokens that were at stake for incorrect predictions. Visit https://gnosis.pm/ to access Gnosis.

The way it works is that you trade predictions or you bet on predictions. The following is the front page of Gnosis:

Gnosis front page

In the preceding screenshot, do note the question that is being asked on their home page. Will Dubai's world record for the largest New Year's Eve fireworks display get broken? You can vote yes or no, and by voting, your tokens are at stake, and an Oracle is then going to tell you whether the event happened or not. The blockchain will then check on that Oracle. Oracles are nothing but smart contracts that interact with the outside elements. They can store and retrieve data—this is just what an Ethereum transaction needs to make decisions. An Oracle is a trusted source, and after checking with this trusted source, you can determine in a blockchain whether the event really did happen or not, and you can be absolutely certain about it.

The following diagram explains exactly how this happens:

The Gnosis platform layers

FirstBlood

FirstBlood is comparable to Gnosis; it is for e-sports. In cases where you are a gamer, you can sign up for a match using tokens. You can put tokens at stake to win tokens, you can put yourself in a queue in a pool of other teams or people, and you can play against them. You can even participate in tournaments. The winner of the game gets the tokens. Oracle is used to decide the outcome of a match. Visit http://firstblood.io to access FirstBlood.

Dynamis

This is a peer-to-peer insurance company, meaning there are no more middlemen. Currently, they are working on unemployment insurance, wherein you get paid to be unemployed! You just have to show people that you are actively looking for a job. The way they verify this is by using an Oracle similar to Gnosis and FirstBlood, but they use it to check LinkedIn and to verify that you have been applying to jobs.

Note

To learn more about Dynamis visit, www.dynamisapp.com.You can also visit http://blog.dynamisapp.com/p2p-insurance-solutions/to gain further insight.

Ujo Music

This is basically a decentralized music store for artists! We all know iTunes, Spotify, and so on. These are companies that are sitting in the middle of artists and their fans, but fans can't know right away how much money artists actually make from each sale. Ujo Music takes care of this by decentralizing the music store. There are no more middlemen, which means that they are a bridge between artists and fan. This certainly means it ensures more power and money for the artists. There are no worries about licensing and it delivers music services only to verified identities. To access Ujo Music, visit https://ujomusic.com/.

The way it works work is described in the screenshot; they have multiple layers and they have their licensing and payments on Ethereum. They have a persistent identity on uPort which is also built on Ethereum:

Ujo Music

The files themselves are stored in decentralized file storage, InterPlanetary File System (IPFS), and the metadata uses constellate which is also built on Ethereum.

The next project is one of my favorites.

Golem

It is a decentralized supercomputer! It does off-chain calculations. Off-chain calculations are calculations that do not happen on the blockchain; calculations are done outside of the blockchain. Then on the on-chain, it will verify these calculations. This means you can rent out your spare computing power or you can hire extra computing power if you need it. You can do this for 3D rendering, computational chemistry, AI machine learning—anything you like. To visit Golem, go to https://golem.network/.

In the following screenshot, you can see the Golem GUI. On the left, you can see a basic wallet; you can also see how much CPU, RAM, and disk space are being used. To the right, you can see a little proof of concept of three tasks being put out there, it's three Blender tasks, in this case, 3D rendering tasks:

Golem GUI

The benefits and limitations

Now that we've looked at an overview of blockchain, we will be having a look at some of the benefits of blockchain. We will also have a look at some of the limitations when you are developing a blockchain application, and we will have a look at how we can overcome these limitations or how we can work around them.

Benefits of blockchain and Ethereum

The following are some of the benefits of blockchain:

Decentralization
Trustlessness—you don't have to trust or put all your money in a single point of failure
It can be very cost effective
It can also present itself to be the backbone of IoT and electric vehicles, a power grid, or a decentralized identity in your smartphone or an electric ID card

Limitations of blockchain and Ethereum

The following are some difficulties one can face while using blockchains:

If you try to use blockchain where you don't need it, it can be very costly.
Blockchains don't really do private data that well because blockchains are supposed to be public.
Sometimes, centralization is required, and blockchains are always decentralized; that doesn't fit.
Most blockchains don't really scale well to high usage.
Storing big files is not really recommended because more computation means more power and more money on a public blockchain; on a private blockchain it just means more power—and you need to invest more in your infrastructure so that is also more money.

Overcoming limitations

Sometimes, you just can't overcome limitations because you just have to use blockchain where you need it. Some things can be overcome, such as storing private data on a public chain. This can be done by adding some extra encryption to your data. You can store big files on the IPFS which is also decentralized—it is not a blockchain, but it is decentralized file storage and it works really well with Ethereum. The problem of scalability is solved by Ethereum's sharding: sharding means splitting the space of accounts, such as contracts, into smaller subspaces. Private chains are also available if you need them, such as J.P. Morgan's Quorum, Monax, and Bletchley. They are all Ethereum based.

Setting up the workflow

Here, we will be doing some workflow setup so we can get started with developing.

Requirements

The following are the things we will need for setting up the workflow:

Google Chrome.
MetaMask, which is a Chrome extension. We will use this to connect to and to test the blockchain.
Node Package Manager (NPM).
Truffle, which is our first framework. We will be using it to develop our first decentralized application.
Ethereum-JS ganache-cli, which is a test blockchain.

Getting started

Follow these steps to set up the workflow:

Get the NPM. It is part of Node.js. You can get it at www.npmjs.com/get-npm, as shown in the following screenshot:

Getting the NPM

Select the latest version displayed on their web page:
- Install MetaMask. To download MetaMask, visithttps://metamask.io/.
Click on GET CHROME EXTENSION.
- Then click on Add to Chrome.
The preceding tool that we will be used to test our blockchain applications. Once you've installed it, a new tab will open up with a video explaining in depth how to use it and what it is.
It is important for you to remember during this book that you can connect to the main network as well as three test networks, but you can also set up your own network, your own blockchain, and run on that. The following screenshot shows this:

MetaMask Main Network

Install the Ethereum blockchain simulator called ganache-cli.
This can be done as explained in the following screenshot:

Command to install Ethereum blockchain simulator

You can install this as a node package by just copying this command and pasting it in your terminal. Once you've pasted it in your terminal, it will start installing, as shown here:

Installing Ethereum Simulator

Once that is done, it will tell you that it has succeeded; quit this for now because I have already reinstalled this. You can go ahead and verify it by typing ganache-cli into your Command Prompt and verifying that it runs. The following will be the output you will get if you have installed the simulator correctly:

Ethereum Simulator

Installing and downloading Truffle.
Truffle also is a simple node package from truffleframework.com that you can install by copying and pasting a command into your terminal, as shown here:

Command for installing Truffle

Once that's done installing, you can verify it by typing truffle, as shown in the following screenshot, and now you can use any of these commands:

Truffle

You can use init to initialize a new project, which we will be doing in the next chapter. Hence, we have successfully completed the installation.

Description

Ethereum enables the development of efficient, smart contracts that contain code. These smart contracts can interact with other smart contracts to make decisions, store data, and send Ether to others.Ethereum Projects for Beginners provides you with a clear introduction to creating cryptocurrencies, smart contracts, and decentralized applications. As you make your way through the book, you’ll get to grips with detailed step-by-step processes to build advanced Ethereum projects. Each project will teach you enough about Ethereum to be productive right away. You will learn how tokenization works, think in a decentralized way, and build blockchain-based distributed computing systems. Towards the end of the book, you will develop interesting Ethereum projects such as creating wallets and secure data sharing.By the end of this book, you will be able to tackle blockchain challenges by implementing end-to-end projects using the full power of the Ethereum blockchain.

What you will learn

•Develop your ideas fast and efficiently using the Ethereum blockchain •Make writing and deploying smart contracts easy and manageable •Work with private data in blockchain applications •Handle large files in blockchain applications •Ensure your decentralized applications are safe •Explore how Ethereum development frameworks work •Create your own cryptocurrency or token on the Ethereum blockchain •Make sure your cryptocurrency is ERC20-compliant to launch an ICO

What do you get with Print?

Instant access to your digital eBook copy whilst your Print order is Shipped

Black & white paperback book shipped to your address

Download this book in EPUB and PDF formats

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Bitcoin	Ethereum
Used for payments	Used for code and logic
It is a digital currency	It is a smart contract platform
Average block time/transaction processing time of 10 minutes	Average block time/transaction processing time of only 17.5 seconds
It is not Turing complete	It is Turing complete

Ethereum Projects for Beginners: Build blockchain-based cryptocurrencies, smart contracts, and DApps

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Product Details

Ethereum Projects for Beginners

Chapter 1. Workflow Setup and Thinking Blockchain

Ethereum-based projects

Gnosis

FirstBlood

Dynamis

Note

Ujo Music

Golem

Overview of blockchain and Ethereum

Going from Bitcoin to Ethereum

The benefits and limitations

Benefits of blockchain and Ethereum

Limitations of blockchain and Ethereum

Overcoming limitations

Setting up the workflow

Requirements

Getting started

Summary

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Description

What you will learn

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Ethereum Projects for Beginners: Build blockchain-based cryptocurrencies, smart contracts, and DApps

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Product Details

Key benefits

Description

What you will learn

What do you get with Print?

Product Details

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Table of Contents

Recommendations for you

Customer reviews

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