ethereum

the world computer

laurent hardy

@donhylo

WHO I AM

2009  Bio Engineer

2010   Water & Energy Nexus

2012   MSc Renewable Energy Systems Technology

2012   Complex Adaptive Systems

2016   Ethereum Madrid

2018   Cryptoeconomics.hub 

The Humans Who DREAM OF cOMPANIES THAT WON’T NEED US

source: FastCompany

@donhylo

can we go
one step further?

@donhylo

@donhylo

1973
first iteration of the internet
1994
you can safely send your credit card number over the internet through HTTPS
2009
bitcoin
1998​
google
2009
uber
2008
airbnb
1995
ebay
1994​
amazon
2004
facebook
2006
twitter
1980
1990
2000
2010
1989
Tim Berners-Lee inventes the World Wide Web at CERN
internet of ideas
internet of shopping
internet of agreement?

source: Vinay Gupta, Rob Knight & Wikipedia

1999
paypal

​a 45 years history of the internet

2015ethereum
2019
today
2014
consensys
2015
parity
1976
apple
1975
microsoft

@donhylo

ETHEREUM the world computer

[output]
[output]
[output]

ETHEREUM the world computer

@donhylo

where are we?

ETHEREUM the world computer

@donhylo

100
?

ETHEREUM the world computer

Joe Lubin

Jimmy Song

@donhylo

ETHEREUM useful properties from Bitcoin

core components

  1. cryptographic identities

  2. consensus mechanism

  3. blockchain architecture

question

why is Bitcoin so appealing?

@donhylo

ETHEREUM useful properties from Bitcoin

properties

  1. pseudoanonous

  2. democratic

  3. immutable

  4. Censorship resistant

  5. distributed

@donhylo

ETHEREUM high level description

  1. Ether + Tokens to pay for computation and align incentives

  2. Turing complete scripting language

  3. Account based (vs UTXO based in bitcoin)

  4. Consensus mechanism will shift to PoS

  5. Block produced each 15 seconds

  6. Externally owned account + contract account

@donhylo

ETHEREUM high level description

monetary policy

capped vs. uncapped

@donhylo

ETHEREUM high level description

today

4.25

12.5

17M

@donhylo

ETHEREUM high level description

2015

2018

72.049.306 ETHER
103.042.415 ETHER

ETHEREUM high level description

@donhylo

@donhylo

ETHEREUM Elements

blockchain + consensus mechanism

ethereum virtual machine (EVM)

smart contract developing platform

@donhylo

ETHEREUM Elements | Smart Contract 

Every node on the Ethereum blockchain network has a copy of the smart contract

But the rest
of the world
has no clue!

ETHEREUM Elements | Smart Contract 

@donhylo

solidity

@donhylo

ETHEREUM Elements | Smart Contract 

contract PiggyBank {

function() public payable {
  }

}

but nobody can crack it

@donhylo

ETHEREUM Elements | Smart Contract 

contract PiggyBank {

    function() public payable {
    }

    function Crack () public {
        selfdestruct(msg.sender);
    }

}

but anybody can crack it and take the money

@donhylo

ETHEREUM Elements | Smart Contract 

contract PiggyBank { 

    address owner;

    function PiggyBank () {
        owner = msg.sender;
    }

    function() public payable {
    }

    function Crack () public {
        selfdestruct(owner);
    }

}

but anybody can crack it

@donhylo

ETHEREUM Elements | Smart Contract 

contract PiggyBank { 

    address owner;

    function PiggyBank () {
        owner = msg.sender;
    }

    function() public payable {
    }

    function Crack () public {
        require(msg.sender == owner);
        selfdestruct(owner);
    }

}

only the owner can crack it

@donhylo

ETHEREUM Elements | EVM (ewasm)

each node has an Ethereum Virtual Machine to run smart contracts

ETHEREUM Elements | Gas 

@donhylo

fee = (startGas — remainingGas) × gas price

ETHEREUM Elements | consensus

@donhylo

Proof-of-Work

Proof-of-Stake

@donhylo

ETHEREUM Web3 

web 3.0

blockchain

dApp & DAO

file storage

communication

domain name

@donhylo

dApp

decentralised application

@donhylo

DAO

decentralised autonomous organisation

@donhylo

ETHEREUM Web3 | dao

THE DAO IS CODE. |

>20.000 participants

~\(\Xi\)12m (~$150m)

~14% of Ethereum market cap

Vitalik put 1500 ETH in it

@donhylo

ETHEREUM Web3 | dao

@donhylo

stablecoin

prediction market

curated registry

ETHEREUM Web3 

zk–starks

governance

off–chain txs

identity

Sovereign Identity

personal

legal

digital

ETHEREUM Web3 | sovereign identity

@donhylo

Self Sovereign Identity

vs. Federated Identity

@donhylo

ETHEREUM Web3 | sovereign identity

Maybe it's what we are
not who we are

@donhylo

ETHEREUM Web3 | sovereign identity

infrastructure

identity

I'm 32

I have 1.764€ on my bank account

I know who Satoshi Nakamoto is

identifiers

verifiable claims

@donhylo

ETHEREUM Web3 | sovereign identity

@donhylo

Token Curated Registries

are

about

making

lists

ETHEREUM ideas | token curated registries

@donhylo

"Token-curated registries
are decentrally-curated lists
with intrinsic economic incentives
for token holders to curate the list’s contents judiciously."

ETHEREUM ideas | token curated registries

@donhylo

consumers want high quality list

candidates want to be included in the list

token holders want to increase the value of their assets

ETHEREUM ideas | token curated registries

token design

STATE OF THE ART

@donhylo

economics

engineering

@donhylo

cryptoeconomics token design

Bitcoin
ASIC
Mining Farm

@donhylo

E(R_i) \varpropto H_i * T
E(Ri)HiTE(R_i) \varpropto H_i * T

expected value

block reward

hash power for the participant

number of tokens rewarded each block

@donhylo

bitcoin objective function

cryptoeconomics token design

Optimisation Design

BY ADDING PRACTICAL CONSTRAINTS

@donhylo

cryptoeconomics token design

2

token engineering

BY ADDING ENGINEERING THEORY, PRACTICE AND TOOLS

MECHANISM DESIGN

IDEAL DESIGN IN THE BEST CASE SCENARIO

1

3

@donhylo

FORMULATE THE PROBLEM

Who are the potential stakeholders?

what do they want?

What value do they provide​?

WHAT DO THEY might get in return?

What are the possible attack vectors?

cryptoeconomics token design | token engineering

THEN, TRANSLATE THOSE INTO OBJECTIVES AND CONSTRAINTS

@donhylo

Stakeholders What do they want? What value do they provide​? ​What might they get in return?
Users
Contributors
Clients
Sponsors
Investors

cryptoeconomics token design | token engineering

@donhylo

Attack Vectors

  1. Stake distribution

  2. Extra blockchain information

  3. IDENTITY THEFT

  4. BRIBERY

  5. collusion

  6. spamming

cryptoeconomics token design | token engineering

@donhylo

objective function

e.g the purpose of the token is
to maximise the amount of X
available to the end users

cryptoeconomics token design | token engineering

@donhylo

constraints

e.g. conditions upon which tokens are used as rewards or penalties

e.g. requirements for using the token

cryptoeconomics token design | token engineering

@donhylo

Existing Pattern

  1. CURATION

  2. PROOFS OF HUMAN OR COMPUTE WORK

  3. IDENTITY

  4. REPUTATION

  5. GOVERNANCE / SOFTWARE UPDATES

  6. THIRD-PARTY ARBITRATION

cryptoeconomics token design | token engineering

@donhylo

ETHEREUM Big problems

privacy

consensus safety

smart contract safety

scalability

@donhylo

ETHEREUM Big problems | Scalability

Bitcoin 3 tx/s
Ethereum 10 tx/s
PayPal 200 tx/s
Credit Card 5,000 tx/s
IoT 50,000–70,000 tx/s
Twitter 200,000 tx/s

@donhylo

ETHEREUM Big problems | Scalability

time between blocks

INCREASE

BLOCK SIZE

DECREASE

@donhylo

ETHEREUM Big problems | Scalability

Layer 1 consensus protocol

Layer 2 applications

Layer 0 network distribution

@donhylo

ETHEREUM Big problems | Scalability trilemma

The trilemma claims that blockchain systems can only at most have two of the following three properties

DECENTRALISATION

SECURITY

SCALABILITY

@donhylo

ETHEREUM Big problems | Scalability trilemma

SACRIFICE DECENTRALISATION

sacrifice SECURITY

SACRIFICE SCALABILITY

existing blockchains

many interconnected blockchains by exchanges

super–big blocks, master nodes, consortium chains, etc

@donhylo

ETHEREUM Big problems | Scalability

ethereum 2.0

Feedback is welcome.

Thanks.

Ethereum | ISDI MIB

By Laurent Hardy

Ethereum | ISDI MIB

An overview of the Ethereum blockchain. We go over the differences with Bitcoin, its vision, key features, and specific components. We take a look at what Web3 might look like and how and who is building it. Moving forward, scalability is going to be a big problem and we see how it can be solved.

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