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Block chain Unit-5

Blockchain concept

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sanjana.kirodian
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11 views

Block chain Unit-5

Blockchain concept

Uploaded by

sanjana.kirodian
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Introduction to

Ethereum
Unit-5
What is Ethereum?
• Blockchain technology gained public notice with the
advent of bitcoin in 2009.
• Ethereum was initially released in 2015.
Within two years of its release, it was ranked the second
best blockchain network, Bitcoin is the first.
The Ethereum network is currently famous for allowing
the implementation of smart contracts.
Smart contracts can be thought of as ‘cryptographic bank
lockers’ which contain certain values.
These cryptographic lockers can only be unlocked when
certain conditions are met.

Unlike bitcoin, Ethereum is a network that can be applied


to various other sectors.

Ethereum is often called Blockchain 2.0 since it proved


the potential of blockchain technology beyond the
financial sector.
The consensus mechanism used in Ethereum is Proof of Stakes(PoS),
which is more energy efficient when compared to that used in the
Bitcoin network, that is, Proof of Work(PoW)
Bitcoin vs Ethereum
Bitcoin Ethereum
Launched in the year 2009 Launched in the year 2015

Created by Satoshi Nakamoto Created by Vitalik Buterin

Consensus Mechanism used is Proof of Work (PoW) Consensus Mechanism used is Proof of Stake (PoS)

Digital currency, store of value Platform for decentralized applications and smart
contracts

Decentralized Applications (DApps) not supported Decentralized Applications (DApps) supported

Bitcoin (BTC) is the cryptocurrency used Ether (ETH) is the cryptocurrency used
Features of Ethereum
Smart contracts: Ethereum allows the creation and
deployment of smart contracts. Smart contracts are
created mainly using a programming language called
solidity. Solidity is an Object Oriented Programming
language that is comparatively easy to learn.

Ethereum Virtual Machine (EVM): It is designed to


operate as a runtime environment for compiling and
deploying Ethereum-based smart contracts.
Ether: Ether is the cryptocurrency of the Ethereum
network. It is the only acceptable form of payment for
transaction fees on the Ethereum network.

Decentralized applications (Dapps): Dapp has its


backend code running on a decentralized peer-to-peer
network. It can have a frontend and user interface
written in any language to make calls and query data
from its backend.

Decentralized autonomous organizations (DAOs): It


is a decentralized organization that works in a
democratic and decentralized fashion. DAO relies on
smart contracts for decision-making or decentralized
voting systems within the organization.
Real-World Applications of
Ethereum
Voting: Voting systems are adopting Ethereum. The results of
polls are available publicly, ensuring a transparent fair system
thus eliminating voting malpractices.
Agreements: With Ethereum smart contracts, agreements and
contracts can be maintained and executed without any alteration.
Ethereum can be used for creating smart contracts and for
digitally recording transactions based on them.
Banking systems: Due to the decentralized nature of the
Ethereum blockchain it becomes challenging for hackers to gain
unauthorized access to the network. It also makes payments on
the Ethereum network secure, so banks are using Ethereum as a
channel for making payments.
Shipping: Ethereum provides a tracking framework that helps
with the tracking of cargo and prevents goods from being
misplaced.

Crowdfunding: Applying Ethereum smart contracts to


blockchain-based crowdfunding platforms helps to increase trust
and information symmetry. It creates many possibilities for
startups by raising funds to create their own digital
cryptocurrency.

Domain names: Ethereum name service allows crypto users to


buy and manage their own domain names on Ethereum, thus
simplifying decentralized transactions without putting users to
remember long, machine-readable addresses.
Type of Ethereum Accounts
Ethereum has two types of accounts:
An externally owned account (EOA)
Contract account.
Externally owned account (EOA): Externally owned
accounts are controlled by private keys. Each EOA has a
public-private key pair. The users can send messages by
creating and signing transactions.

Contract Account: Contract accounts are controlled by


contract codes. These codes are stored with the account.
Each contract account has an ether balance associated
with it. The contract code of these accounts gets
activated every time a transaction from an EOA or a
message from another contract is received by it. When
the contract code activates, it allows to read/write the
message to the local storage, send messages and create
contracts.
Benefits of Ethereum
Availability: As the Ethereum network is decentralized so there is no
downtime. Even if one node goes down other computing nodes are
available.

Privacy: Users don’t need to enter their personal credentials while using
the network for exchanges, thus allowing them to remain anonymous

Security: Ethereum is designed to be unhackable, as the hackers have to


get control of the majority of the network nodes to exploit the network

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