You're reading from Learn Ethereum - Second Edition

Product typeBook

Published inAug 2023

PublisherPackt

ISBN-139781804616512

Edition2nd Edition

Concepts

Blockchain

Authors (3):

Xun (Brian) Wu

Zhihong Zou

Dongying Song

View More author details

Ushering in the world of Ethereum

Vitalik Buterin, the founder of Ethereum, addressed the limitations of Bitcoin discussed earlier quite differently. While working on Bitcoin, he recognized that Bitcoin’s stack-based scripting is very limited and lacks the functionality and capability for application development beyond the transfer of cryptocurrency ownership. He saw it as a huge opportunity and began writing his own whitepaper in 2013.

In his famous Ethereum whitepaper (https://github.com/ethereum/wiki/wiki/White-Paper), Vitalik laid out his vision and intent to build a blockchain that includes the following:

A built-in Turing-complete programming language
A smart contract and decentralized application platform, allowing anyone to define, create, and trade all types of cryptocurrencies and crypto assets

Similar to Bitcoin, Ethereum is built on blockchain technology. It has all of the critical characteristics of a blockchain. It is a shared distributed ledger on top of a decentralized P2P network. It works in a similar way to that discussed in the Bitcoin and cryptocurrency section earlier in this chapter. Unlike Bitcoin, which is a decentralized state transition system with limited decentralized computing capability via Bitcoin scripting, Ethereum is a decentralized computing and data platform featuring Turing-complete smart contract functionality.

Ethereum introduced a few new and critical concepts, including the smart contract, EVM, and account. We will cover them in detail in the rest of this book.

Smart contract

A smart contract is a piece of programming code that is stored and executed on the blockchain. Ethereum now has a Turing-complete language, Solidity, which enables developers to develop and deploy smart contracts. In addition to moving ether (the cryptocurrency of the Ethereum network) between accounts, Ethereum smart contract code can support more modern program language constructs such as loops and perform much more complex computations, including data access, cryptographic algorithms, and function calls. Each such operation has a gas price associated with it. That is how Ethereum calculates the transaction cost of running smart contracts and, through a gas limit, protects smart contracts from infinite loops or programming errors.

A smart contract is like a scripted agreement between interacting parties; the code built into the contract is stored on the Ethereum blockchain and cannot be tampered with or removed. This greatly increases the credibility of legal documents.

EVM

The EVM is the runtime environment for smart contracts in Ethereum. It is a virtual operating system deployed as an Ethereum client to all network nodes across the globe. Similar to the Java Virtual Machine (JVM) in the Java world, contract code is compiled into bytecode, which is loaded into the EVM as part of contract creation.

Account

There is no concept of accounts in Bitcoin. Instead, Bitcoin uses the concept of UTXO to keep track of money transfers and account balances. Ethereum introduces the concept of the world state and account. The world state comprises a mapping of all accounts and their public addresses. To facilitate both state transactions and decentralized computing, Ethereum introduces two types of accounts: Externally Owned Accounts (EOAs), controlled by private keys, and contract accounts, controlled by their contract code.

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Authors (3)

Xun (Brian) Wu

Xun (Brian) Wu is a senior blockchain architect and consultant. With over 20 years of hands-on experience across various technologies, including Blockchain, big data, cloud, AI, systems, and infrastructure, Brian has worked on more than 50 projects in his career. He has authored nine books, which have been published by O'Reilly, Packt, and Apress, focusing on popular fields within the Blockchain industry. The titles of his books include: Learn Ethereum (First Edition), Learn Ethereum (Second Edition), Blockchain for Teens, Hands-On Smart Contract Development with Hyperledger Fabric V2, Hyperledger Cookbook, Blockchain Quick Start Guide, Security Tokens and Stablecoins Quick Start Guide, Blockchain by Example, and Seven NoSQL Databases in a Week.
Read more about Xun (Brian) Wu

Zhihong Zou

Zhihong Zou is an innovative technology leader with over 20 years of experience delivering cutting-edge enterprise solutions. He has led transformative solutions in telecommunications, healthcare, and government that leverage blockchain, AI/ML, and modern cloud architectures to solve complex business challenges. As an insightful visionary and trusted advisor, Zhihong is passionate about driving digital transformation and future-proofing organizations. He holds an M.Sc degree in computational mathematics and an M.Sc in computer science. Zhihong has authored multiple papers on numerical computing and two popular editions of the book Learn Ethereum. In his free time, Zhihong enjoys sharing his blockchain expertise as an advocate and writer.
Read more about Zhihong Zou

Dongying Song

Dongying Song has been a noteworthy leader in Blockchain, Ethereum, big data, ML, data science, and the cloud application development space for over 8 years. As an experienced software engineer and data scientist, she has worked for top-tier banks and pharmaceutical and technology companies. Dongying holds a master's degree in statistics from Columbia University and majored in mathematics during her undergraduate years. Her recent activities focus on Blockchain, Ethereum, and smart contract developments.
Read more about Dongying Song

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