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How exactly ethereum uses blockchain technology?
cuddaloreappu
Member Posts: 20 ✭
I can understand the concept of blockchain somehow, I also could understand the concept of ethereum..but i could not understand how ethereum operates on the blockchain framework.
help
help
Comments
If you had some central place, where you gave the proofs, and it was only accepted there, that would solve the problem. However, this would be a point of weakness/control.
The blockchain provides a new central point each time, it chooses a random miner by using a hard cryptographic problem, which you can only solve by through throwing computing power onto it, and the solver is in effect choosen (psuedo-ish, it doesnt matter)randomly. The miners cant neccesarily be trusted though, so the solver must also provide a valid block for other nodes to accept it.
To be specific, the miners have to find a value that combined with the checksum of the previous block finds a value below some other value, that is set to change the difficulty value, and regulate the interval in which blocks are mined. (10 min for bitcoin)
So that is what the blockchain trick is. It is something i still want to figure out some day, but bitcoin seems taken the approaches that were there before the blockchain. The approach where you take your belongings(inputs) and pass it along to the next owner.(outputs)
The Ethereum founders, however, realized that you do not need to list where you got it from and where to send it from. You can just put truths in the blocks, and other nodes can see if it is false, and false is invalid, and the block ignored.(and of no use to the miner) ('truth or invalid') So every full node can keep track of everyones balances instead of figuring things out from some old transaction. And if any send more than they have it is invalid.
Going further, they can do the same for balances of 'fake adresses' with no private key associated. And instead of just sending ethers, you can also send data. However, instead of having them just fake addresses, they can be associated programs/functions, and the data is the arguments of the programs/functions. The functions could also have data associate with them. These are the contracts of Ethereum.
All assets in Ethereum that arent ethers are completely governed by the contracts. For instance a subcurrency uses the data of the program to store the balances of people holding said subcurrency. Its code handles adding from one balance and substracting from the other.
(aside)The video How Bitcoin Works Under the Hood is a very accessible yet fairly thurrough explanation of bitcoin.
Note that some of the differences also make Ethereum more efficient, as it doesnt need to look in the history to check the inputs of some transaction, and transactions dont need to list inputs. Infact, once blocks are far enough in the past they can be discarded alltogether.
At the core of Ethereum a blockchain is found. It works the way Jasper described above.
In bitcoin the transactions are actually little scripts. The language they use is limited and while you can do a few neat things (escrow, deposits, multisig), you'll hit these limitations very quickly.
Ethereum on the other hand separated transactions from contracts (code). Contracts are programs that are first class citizens on Ethereum. They can emit and receive transactions for example, amongst other things. They too live on the blockchain, and their output is guaranteed by a the global consensus reached through mining.
I hope this helps a bit!