Ethereum: Decentralized Platform

A decentralized platform that runs smart contracts. Ethereum can deal with anything that has value. Smart contract authors have to be very careful to not introduce bugs that can be hacked.


Differences between Ethereum and Bitcoin:

  • Bitcoin was designed to be just a digital currency. Because of smart contracts, Ethereum has much larger capabilities.

  • Smart contracts: bundles of code on the blockchain

  • Ethereum has faster block times, but creates more orphan blocks. Faster confirmations of contracts.

  • Mining: more than 2/3 of BTC has already been mined.

Ether: used to pay for transaction on the Ethereum blockchain.


History:

  • Created by Vitalik Buterin had ideas of a scripting language for BTC. Nobody supported his idea so he created a new project and ran a crowd sale. Gave out 11.9 million ether to investors. They raised 150 million dollars. The most of any crowd sale in history.

  • Once the DAO was on the blockchain, it got hacked. The hacker made off of $50 million worth of Ether. There was a bug in the code. Vitalik Buterin came up with a way to stop the hackers. They did a hard fork. Lots of Ethereum users didn't agree with the hard fork, because they feel like blockchains can't be changed even to recover stolen funds.

Using Ethereum

  • Keys: public and private keys. The public keys are given to people when they want to send you ether. The private key is a unique line of code that proves your identity to Ethereum.

  • Wallets: before you buy ether, you need a wallet to store your private keys. Ether is stored on the blockchain.

  • Desktop wallets: on your pc. Wallets generate your keys for you.

  • Hardware wallets: immune to viruses designed to steal from software wallets

  • Mobile wallets: Lite wallet. Not secure

  • Paper wallet: a piece of paper that creates keys for you. guard them with your life. Make multiple copies and store them in many places. Safety deposit boxes.

  • Mist browser: Wallet and browser. Provides a complete view of the blockchain.

How to buy and send Ether

  • Coinbase

  • Ethereum meetups to buy peer to peer

  • Buy bitcoin first, then trade it into Ether

Etheruem and Security

  • Blockchain hacks. No BC is invulnerable.

  • Browsers have vulnerabilities.

  • 51% attach. The hacker takes over the transactions and become top dog.

  • BTC got hacked in 2010. It was caught fast so it didn't lose money. A hacker was able to create a 184 billion transaction. They patched it right away. They've since been hacked again.

How can I loose all my ether

  • Hack

  • Email provider loses it's database.

  • Someone with administrator rights.

  • Exchange disappears along with the money. Mt Gox: the largest exchange that did this.

  • You let in a Trojan: Prevalent hiding in porn.

  • Fooled by an email: Spoof

  • You lose your keys. Very common


How to keep Ether secure:

  • Wallets. No online wallets. Don't be using any old wallet online. Software wallets are only as secure as your computer.

  • Cold storage: For savings. Untouched

  • Hot wallets: for paying day to day expenses.

  • Splitting up finances. Don't put all your money in one place.

  • Choose the right exchange. Most exchanges are centralized. If the higher ups start leaving, you leave too. If there are technical problems on the site, the developers aren't on top of things. Be familiar w/ the fine print:

  • how coins are purchased

  • exchange fees

  • what others are saying about it

  • Keep your email secure. 90% of hacks are done through email.

  • Create unique password

  • multifactor authentication

  • false info in your security questions

  • Keep a cheap smart phone for only financial stuff. Don't connect to public wifi

  • mine ether

Mining for Ether

  • Mist Browser: created by Ethereum. You can also become a node.

  • Mining is sorting through blocks and approving transactions.

  • Blocks represent anything. They take the form of smart contracts

  • Proof of work.

  • No cheating

  • Solo mining and pool mining. Join pools to make steady ether.

  • Takes lots of processing power and electricity.

  • If you cant profit, it's not worth it.

  • Hardware

  • a motherboard. 1-2 gpus

  • CPU

  • GPU for speed

  • RAM large ram 8+

  • PSU: Power supply unit. High quality

  • Harddrive: SSD 64gb

  • Software: Linux, Windows, or Ethos (stripped linux).

  • Mining software.

How is Ethereum Doing? How does it stack up against Bitcoin

Token: appear on the Ethereum blockchain, and can represent anything (a car, art, stocks, bonds...)


Fund a project: with a well written contract, no one loses


Start a DAO: Decentralized Autonomous Organization an organization created by developers to automate decisions and facilitate cryptocurrency transactions.


Ethereum vs Bitcoin:

Ransomware attacks erode community trust in BTC.


The future of Ethereum:

The EEA created to join companies with tech providers so they can start using Ethereum. What cant Ethereum do? The innovation is endless.

Affecting healthcare. Pharmacies

Auger. Rep. Used by journalists. Encourages and rewards honesty. Could be used by farmers, and doctors.

Identity management benefits. Smart contracts can be used to secure identities. Estonia has a national identity ledger. Users are in full control of who and when can see their identity.


Investing in Ethereum:

  • China's motivation.

  • Long term potential. It's stable.

  • Volatile is normal in crypto.

  • Security is built in

  • Price will keep going up (opinion). No limit on the number of Dapps

  • Real world usage. People are using it

  • Pros:

  • Invest if you

  • Don't need to sell for 2-3 years at least

  • Are patient

  • Believe in the future of Ethereum

  • Can afford to lose the money you invest

  • Can tolerate risk

  • Ethereum:

  • Volatile

  • can be clones

  • can lose money in a hack

  • no central authority has its drawbacks

  • could be heading for a bubble

Volatility is normal. Prices always yo-yo

Flash crashes are normal too; Is it above $80?

Buy the dip. Experts forecast these things

Rely on the right source. Check against reality. What's really going on.

Keep tabs on what's going on.


The future of peer to peer.

  • The crowd becomes the market. People who participate in the market, run the market.

  • Decentralized peer to peer markets. Darknet. Openbazaar (like ebay), Swarm (Uber competior), OB1.

Capturing value

Search, discovery, logistics, trust, & reputation. These always bring value. the creation of layers that re-aggregate value through those 5 things.


Creating Dapps:

Ethereum.org

Public key

Peer to peer networking

nodes

EVM: Ethereum VM

Ether

Gas: small amounts of ether that keeps things running

Dev environment. IDE

Dapp Frameworks: Dapple ...

Testing environments






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