Ethereum Explained

hello world it's Suraj and today I'm gonna go over a theorem that is the second-biggest cryptocurrency behind Bitcoin that lets us do incredible things the demo that I'm going to build in this episode is a decentralized conference ticket purchasing web app let me show you what it looks like it's very simple you can buy a ticket you can refund a ticket you can create a wallet but the only functionality that we really care about is buying a ticket so if we have some ticket price I can input some address so that is my address and I can buy a ticket with the money that I have and then the amount of registrants increases by one it's a very simple web app that lets you buy tickets for a conference but it's decentralized what benefits does de-centralized offer in this case very few benefits one you don't have to worry about a third party taking a fee so it's cheaper for both parties and two it's censorship resistant which isn't that big a deal for a conference ticket web app but the point is to talk about etherium and learn how contracts and the model-view-controller architecture of web apps all play together okay so first of all what is a theorem so aetherium is a platform to easily build decentralized applications using blockchain technology so we know that bitcoin was the first blockchain application and aetherium does two applications what bitcoin did for money that is removes a need for a trusted third party so for the Bitcoin blockchain we had blocks and these blocks are just are just objects right that store data it's basically up the blockchain is basically a glorified linked list okay that's store on everybody's computer and the etherion blockchain is very similar except it's different in that what's stored in those blocks are not just transactions you can also store code snippets in those blocks smart contracts that's really the key bit here theorem is a programmable blockchain while Bitcoin isn't well Bitcoin does have its own scripting language but it's not as awesome or complete or capable as aetherium x' and that's for security reasons but anyways you can build decentralized applications and you might be you know decentralized what a decentralized application looks kind of like this it's a different stack entirely so at the bottom we have a blockchain and a blockchain allows for this decentralized consensus over application level constructs there are so many things in an app that different parties need to agree upon is this a valid username is this a valid identity is this a valid address is this a valid reputation score is this a valid tweet is this a valid owner is this a valid owner of this data you need consensus right if we had a server there's no need for consensus right there's no democracy it's a dictatorship and the server controls everything but in a decentralized application we need consensus and the blockchain was really that missing ingredient to reach consensus in a distributed decentralized way so at the bottom of the stack is the blockchain and 2.0 means the ethereum blockchain or any blockchain that allows for smart contracts on top of that we have a storage layer right normally we use AWS we use Google Cloud there are a bunch of service providers for storing your data in the cloud that are controlled by one entity but in this case we would want a decentralized version of storage that is peer to peer owned by no entities and ipfs the interplanetary file system is one great example of that on top of the storage provider comes the smart contracts so the smart contracts are code snippets that will live on the blockchain they are decentralized computation while storage and content delivery is decentralized by IP FS computation is decentralized by the etherium blockchains smart contracts on top of that then we can start adding application level constructs identity reputation attention eyes and on using all of this we can create adapt or a decentralized application it doesn't depend on any specific party existing and it's not about one party selling its services it's more about a network a community of people who all share in ownership of some piece of software and so everybody profits and everybody contributes in some way it's a more communal more progressive way of building software that is emerging we'll soon be the mainstream way to build software what are some examples of DAPs I'm sure there are a lot there are there are quite a few check to check this one out so wave fund is one so wave fund is a decentralized Kickstarter right we know how Kickstarter works it's all about crowdfunding and wave fund use a smart contract technology to let people crowd fund certain applications or projects or really anything like that that's one example another one is Al Gore which is pretty interesting because it's all about forecasting right about getting rewarded for your predictions and it's controlled by no party and it's it's all publicly verifiable all the bets all the amount of funds it's all publicly verifiable there is no trust involved which is a great use case provenance is another one so provenance is all about making supply chains transparent if you're a business and you're getting some kind of ingredient or some kind of tool from some third party company and you want to know what's in that and you want to know where it's been and who created it instead of having to trust that company you can verify all of that publicly on a blockchain because every product has a story what a great tagline right that's some that's some good marketing right there but empowering the whole supply chain for everybody it's a win win win win situation so great use case here but there are lots those are just three that I just kind of randomly picked there's a lot and there's a lot more to come so let's get to the architecture of aetherium right so cerium is it it provides the consensus layer okay so it provides both the consensus layer the economic layer and the blockchain services layer so the bottom three layers aetherium kind of it solves right so for consensus like I said we need some way to agree upon all of these application level constructs on top of the consensus mechanisms we need some kind of economic token to incentivize all of these nodes to do the computation or do the storage or to do whatever is necessary right and so that's where the crypto tokens come into play on top of that we can start offering services right these are these are these are code snippets that actually do things name registry smart contracts messaging Oracle's distributed hashed Able's for storing data right on top of that we have interoperability so in this decentralized world where we are just imagining all of these different apps and they all have their own tokens how are you supposed to exchange value between all of these token silos well the answer is to have a universal wrapper around all crypto currencies such that there is one currency that you have to deal with and you don't have to think about any other currency whether that's your state currency or whether that's Bitcoin or whatever it is and under the hood this protocol this exchange protocol would transfer value or transmit value between all of these different tokens at as you use different services right so you can think of kind of a lay a stack of decentralized api's that all use their own token you pay this you pay the top API with whatever token you want and it pays all the other api's and the tokens that they require using this kind of decentralized exchange protocol which you can just use in your app and there's a lot of them stellar is a great one the stellar protocol but there are a lot and on top of all of this we have the browser right this is how we access the decentralized applications now ideally the mainstream browsers that we know and love Chrome Firefox Internet Explorer no I'm just kidding that one really sucks opera they would accept these decentralized protocols natively so we wouldn't have to create another browser and hopefully I think they will very soon but in the meantime we have browsers that are made for decentralized applications like mist and Maelstrom and all these other ones and once we have all of that then we can build DAPs on using all this technology just scratch out storge though because those guys have been vaporware forever but everything else looks good open Bazaar is dope and dows and all this stuff but storge come on show show show us what you got right so like I said we want to store the data in ipfs right you don't want to store data directly in the blockchain because it's too big right every miner has to download a copy of this blockchain all the transactions and that includes code and whatever else is in those transactions but if we're storing movies really big files in the blockchain that things gonna get way too huge so no one's gonna be able to download all of it right so the way to fix that is to store it in some distributed hash table like ipfs what what ipfs gives back is a hash a Content address for all of that content and that is what we store in the blockchain right so we store it in a distributed hash table get back the hash and store that hash in the blockchain which then points to the data storage right so in terms of the architecture the etherium whitepaper is quite is quite extensive and there's a lot happening here in this huge diagram but let's go over it a little bit right so with the ethereum blockchain you have blocks and these blocks are all linked together and inside each block is a list of transactions and all of those transactions contain state and other programmable parameters so what the etherium blockchain does is it's stored on every miners computer it currently uses the proof-of-work algorithm to verify all to verify the entire network and inside each of these blocks they run the computation that smart contract contained in each block and then once that computation has been successfully done on each miners computer the whole network will do the same thing and then the majority of the network if they can agree on the computation of that code snippet it is then added to the blockchain as an immutable construct so let's so I mean there is so much that we could talk about when it comes to block chains and all this stuff and in particular the etherium blockchain but next week I'm starting this reinforcement learning course so I this is really the last week of blockchain stuff before we get into some reinforcement learning stuff I'm gonna keep my lips closed on that one but there's one thing that I do want to talk about and that is the Merkel tree data structure so notice that inside of each block there is a there is a tree right there is a Merkel tree so it looks kind of like this this is the Bitcoin blockchain right like I said it's a glorified singly linked list it's got a pointer to the previous hash of the of the previous block it's got a nonce to ensure novelty write a number only used once it's got a timestamp and then it's got a Merkel root so the Merkel root is the head node of a tree a Merkel tree so you might be thinking wait a second why can't a block just store a bunch of transactions as a list well ince into one big block header why does it have to store it as a tree well the answer is if we just sorted all as one big list that would provide some that would that would cause some huge scalability issues so to get around this the Merkel tree data structure is used which is a way to hash a large number of chunks of data together which relies on splitting the chunks into buckets and each bucket only contains a few few chunks so it's hashes all the way down the chain and you could think of this kind of like a file directory right you have the root directory you have child directories and it just keeps going and the reason we use a Merkel tree is because it allows for merkel proofs which consists of a chunk the root hash of the tree and the branch consisting of all the hashes going up along the path from the chunk to the root and so anyone reading that proof can verify that the hashing is consistent going all the way up to up the tree so the Bitcoin so the Bitcoin blockchain uses a very simple Merkel tree right and it's got these parameters but the limitation of that Merkel tree is that it can't prove anything about the current state that means who's holding some digital asset name registrations the status of some financial contract and so with the etherion block chain does is it modifies that Merkel tree to store and stores not and store is not just one Merkel tree but three trees for three kinds of objects transactions receipts which are essentially pieces of data showing the effect of each transaction and state which is the state of your code right it's a decentralized computer that can store a state and they call this instead a patricia tree not a Merkel tree because it's modified to store state which then allows clients to easily make and get verifiable verifiable answers to queries like tell me all the instances of an event of type X like that and X could be a crowdfunding contract reaching its goal etc right so the Patricia tree allows for two store allows a blockchain to store state so there's a lot right so if we look at the etherium github there are so many repositories there but really there are three key bits here right you have the etherium virtual machine which calculates elements that run contract logic now this is kind of encapsulated by the etherium client then you have swarm which is the storage layer which we can just use ipfs for and then whisper is for all the nodes being able to message each other and for that we can actually also use IP FS so really all you need are etherium and ipfs and took to run ethereum you can just download the client yourself just like you would BitTorrent or Bitcoin and then with that client you can connect the ethereal Network you can explore it there on his blockchain run smart contracts mined new blocks the whole deal right so the so the client is our gateway into the etherium network whoever you are and so if we if we think about all of the pieces here you have eath or ether which is the inbuilt currency it's the cryptocurrency itself you have the etherium virtual machine which allows for a centralized computation like Heroku ipfs and ipfs for storage and for communication you have smart contract programming language and really the one that we should care about his solidity which is very similar to JavaScript and it's currently the most popular of them and then you have the client of course death which is in go you have eath which is in c++ and you have pi each app which is written in Python but the best one is go so go was a language created by Google to handle distributed computing they in fact upgrade it from C++ to go so because it was it was more efficient for the it was more efficient for computing on Google's huge distributed computing stack so if Google uses it you know it's a good language and go is just a beautiful language if you if you've never looked at it before I would HIGHLY come in checking out go it's really a beautiful language that is it's pretty new it was designed with a lot of the elements of distributed computing and even decentralized computing in mind it's currently the etherium client that is getting the most activity and it's just it's just great Prak practice because I think we're gonna start seeing a lot more artificial intelligences and a lot more fundamental architectures being built with go right so Jeff is the one to look at and then you've got the smart contract languages you've got lol which is kind of like Lisp which no one uses serpent which used to be similar which is similar to Python and in solidity solidity which is the most popular and it's very similar to JavaScript and it's the one that we'll use so there's a workflow for deploying smart contracts the first step is to download your etherium node and then you'll write your solidity code and then compile it usually using a framework like truffle and then you can deploy your contract to the network and then once you've deployed your contract to the network then you can call that contract using web 3j s which is the front-end client that speaks to the etherium blockchain right so the idea is that you know when you're writing these web apps you have this Model View controller architecture right Model View controller we're all familiar with that it's like Ruby on Rails uses it and angular and all of these apps so in all these software stacks so in in in the case of decentralized applications the controller is instead of speaking to a server it's speaking to block chains and to distributed hash tables in terms of a model that kind of stays very similar but you also have this other type of model and that model is the smart contract you can kind of think of smart contracts like models that the controller will speak to and the same kind of logic applies when building here we need smart models thin controllers and dumb views and your views are your HTML and CSS and JavaScript files right so all the storage is happening in ipfs this distributed storage network and the application level constructs those are user names anything that you need people to agree upon write game scores all that is stored on the blockchain and we can use smart contracts to to help facilitate that so let's just get started with building this app right so in order to run this code that I'm going to show you there's very very few steps all right so our first step is to use NPM the node package manager and using it we can install the test RPC chain which is the test block chain right so this is a block chain we can use for development purposes that we can spend fake money on and no real money is used so it's super useful for us and once that that's installed we can install truffle so truffle is a smart contract framework that offers templates for smart contract building so you don't have to start from scratch right there scaffolds that you can use to build software faster and once I've installed truffle then we can go ahead and run the test RPC chain directly in terminal in its own console window once test RPC is running then we can go ahead and run truffle compile on our code and then truffle my great trouble test and then truffle serve but there's there's one thing that I want to do first if we look at our app we can see the in HTML all of the constructs that we created right here right so buy to get refunded ticket create a wallet we can see them in all of these sections and they are calling JavaScript right so JavaScript would be the buttons here and JavaScript the JavaScript is identified by the IDS if we look in the JavaScript we can see the application the app dot J S which contains all of the code right so when we initialize a conference we are calling these functions on these objects right so these functions from my conference instance are from the smart contract directly right so these are functions that we embed in the smart contracts that my conference instance think of it like a class right so that the smart contract is a class and we can call all the functions that we ride right inside the contract directly from a pj s because we're using web 3 j s the framework for talking to the etherion blockchain so it's pretty simple so we would just have to write out our smart contract like so right so right out our smart contract for the conference and then we can run it it's just like a class right so we'll say all right what are our what are our global values here right we have an address for the public for the organizer of the contract we have some sort of mapping right because we want an address to map directly to an integer value rights because that integer value represents the number of registration registrants that were paid right we want to keep track of this stuff and then under that we want two more variables one for the number of registrants and then one for the and then one for the and then one for the quota like how much what is our maximum limit of tickets that we will let people buy then we'll have a function for the deposit so we can log the event right so we want to log how much is being deposited into this smart contract and we have those parameters in place for that one more event which is for refunds right we're going to log how many refunds are being processed here right from what address are they coming from the amount and then the type which is an integer we can then construct our function using this constructor function we can then construct our conference using the constructor function so it's a function conference and then we can go ahead and initialize those variables that we define the for hand we're getting some message from whoever sends the transaction to the smart contract we have a sec quota that Initiatives initializes zero and then we have a number of registrants that starts off as zeros quota is 100 and then number of registrants is 0 under that we can go ahead and finally write our buy ticket function right this this function is gonna let anybody buy a ticket and like I said we can call this function directly from app dot Jaya so we will say initialize conference and then we can run conference by ticket and so whenever someone clicks on buy ticket it would then call this contract directly just like that right so then we can say well if the number of reps so we'll start off the function by saying if the number of registrants is greater than the quota that we have in plays then okay that we need to so we need to go ahead and write a thro statement which will ensure that the funds will be returned all right so that's it for our contract very simple stuff right and then like I said we can call this contract from a pas and it's going to run the contract just like normal okay so that's a demo I hope you liked learning about aetherium there's so much more I could talk about there's some great links in the video description and hope you liked watching this video if you find this stuff interesting and you want to see more go ahead and hit the subscribe button for now I've got to go invest in myself and not any other cryptocurrency for the moment so thanks for watching

Channel: Siraj Raval

Views: 320,567

Keywords: ethereum explained in detail, ethereum blockchain, blockchain ethereum, ethereum explained, etherium explained, etherum explained, ethereum tutorial, ethereum blockchain explained, ethereum explained simply, how ethereum works, how does ethereum work, what is ethereum, etherium, ethereum, etherum, blockchain explained, initial crowd offering, web 3, turing complete, programming, blockchain technology, deep learning, algorithms, cryptocurrency, blockchain

Id: -_Qs0XdPpw8

Length: 22min 33sec (1353 seconds)

Published: Tue Oct 17 2017

Reddit Comments

[u/Zizazorro]

I bet a lot of you already know his channel, but if you don't, check it out. It's really high end stuff

[u/benben11d12]

Siraj puts out great content. He's also mellowed out a bit since he started. Even though his videos were always full of good information, I couldn't watch for a while because his personality was so supercharged

[u/GeneticsGuy]

As someone fairly new to the Ethereum world, who bought in at 250, I have to say that it is stuff like this that really makes me believe Ethereum is the real future. Sure Bitcoin is great, and I've been a holder since I first bought in a couple years ago, and I mined Dogecoin to sell for Bitcoin, but again, as a believer not just in the decentralized philosophy, but a believer that this is going to actually fulfill market demand once companies catch on, this is the true future.

Brilliant video. Simple explanation, though as a programmer myself it probably came easier. I look forward to the true utility that the technology brings, and as a programmer, it's one of the most exciting aspects of Ethereum.

[u/Artist701]

Somehow the only thing I will learn remember from this is: “Internet Explorer really sucks.” :)

[u/TehNatorade]

Thanks for sharing! Never heard of this guy, but this was super helpful/informative. Will definitely be checking out more of his stuff.

[u/Suanni1]

This is the kind of stuff I wanna learn about at Uni

[u/Yodacheese]

What happened at the end? Demo magically finished?

[u/tragicwasp]

He has big hands

[u/adityakr56]

Spot on..!!