Slightly academic overview of the Ethereum project.

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ethereum

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Quick Overview

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Universal transaction ledger
Protocol determines:
order
meaning
in terms of state change

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Arbitrary state stored between transactions
Arbitrary state changes due to transactions
thus
Provides arbitration & enforcement for
agreements with arbitrary mechanics

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Transaction state-transition function
σ' = (σ, T, H)ϒ
Block reward function
σ' = Ω(σ, B)
Block state transition funtion
σ' = Π(σ, B)
where
B = (H, (T[0], T[1], …), U)
Π(σ, B) = Ω( ( (σ, T[0], H), T[1], H), B)ϒ ϒ

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What?

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Address: public key (-ish)
System stores an account per address:
value
transaction count
state
code

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Accounts
Create with code
No private key (arbitrary public deterministically) chosen;
Thus no external access.
Create through sending funds
Possibility of private key (public assumed to be derived);
Full external access; no code possible.

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Transaction state-transition (σ, T, H)ϒ
Resultant state depends on T type;
Creation or Message

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Creation used to create account with associated
code.
Message transfers value & invokes associated
code.

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Code execution:
Turing-complete instruction set machine;
stack-based architecture, with memory.
Code in separate ROM; and...
arbitrary-sized storage.

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No I/O, but...
Instructions to make messages or create

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Message Invokation
Runs code in fresh instance of machine
Runs with contract's existing state
Passed byte-array input & can return output.

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Creation
Creates a new contract
Runs initialisation code which returns the machine's code ROM

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VM Execution fully deterministic
Only I/O is invokation & creation

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How?

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Peer-network that shares:
Blocks
Transactions

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Transactions:
Cryptographically signed
Either create (includes init code);
or message (includes destination & input data)

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Blocks:
Includes parent block's hash
Series of transactions
Includes cryptographic proof-of-work
Author takes a reward

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Block-tree forms from blocks
“GHOST” protocol:
Reduced to block-chain as the root-leaf that
required greatest computation (sum of
proof-of-work, including immediate relatives)

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Consensus state is the final state of the canonical
block chain

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Why?

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Decentralised zero-trust or distributed-trust
systems.
In short
Crypto-Law.

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Useful abstraction platform for:
Virtual currencies (Bitcoin)
Digital proxy currencies (CFD, 'Goldcoin')
Financial instruments (Cons. Tape, Mastercoin)
Registrars (ICANN, Namecoin)

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Reputation systems (Facebook, eBay)
Voting systems
DAOs

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Limitations
Scalability all nodes evaluate all transactions,
store all state
Public impossible to work with secrets

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Future
Add:
decentralised publication & distribution,
diffuse, secure messaging:
Post-Snowden Web;
Web 3.0