Blockchain 2.0: Smart Contracts

The new key-concept is Smart Contracts, small computer programs that “live” in the blockchain. They are autonomous computer programs that execute automatically and conditions defined beforehand such as the facilitation, verification, or enforcement of the performance of a contract. One significant advantage this technology offers is the blockchain making it impossible to tamper or hack Smart Contracts. So Smart Contracts reduce the cost of verification, execution, arbitration, and fraud prevention and allow clear contract definition overcoming the moral hazard problem.

Most prominent in this field is the Ethereum Blockchain?—?with its aim at allowing the implementation of Smart Contracts.

Ethereum’s Scripting Language is the Solidity. The Ethereum programming language Solidity is currently being integrated with formal verification tools. Formal verification is the application of mathematical analysis by computer programs on other computer programs.

The Ethereum blockchain shares significant similarities with the Bitcoin blockchain. Transactions are appended in both networks via a proof-of-work consensus mechanism. The proof-of-work consensus is a computational exercise undertaken by the participants of the Ethereum network to create new blocks of transactions via a process called mining. In Ethereum, two kinds of accounts can be created. The first is called an externally owned account(EOA), which is similar to a bitcoin account that stores an amount of currency. Transactions between two EOAs is the same as a bitcoin transaction between two wallets. Ethereum has a second-kind of account called a contract. A contract account stores the code of the contract and has its own data storage.

Furthermore, a transaction from an EOA to another EOA transfers a quantity of Ether. A transaction to a contract account runs the contract code. The contract code can read the code, amount of ether, and write to its own storage. More importantly, the contract can send a transaction to another contract account. When a contract executes its code, it can create another contract as well.

When looking at using blockchain in the enterprise world, the very safeguards that ensure the integrity of public blockchain networks, bring about scalability problems.

All transactions, smart contract code (bytecode), and state are typically in the clear—visible to anyone who joins the network. This may be desirable in the cryptocurrency/public DApps world, but not in the enterprise world.

Large enterprises have become accustomed, over the last few decades, to building out the secure, reliable, high-performance infrastructure that they manage, to run their critical business applications and systems.

 

Blockchain

Evolution

Blockchain 2.0
Subject Smart Contracts
Applications Ethereum, Corda, Hyperledger…
Applicability Multiple  Linked Blockchains
Taxonomy Public, Private, Consortiums
Consensus Concepts PoW, PoS, DPoS, PoI ,PoV..
 Source User Choice
Challenges Scalability, Halting Problem, Security,

Delivery Based Timeline, DAO Challenges

 

The Ethereum blockchain shares significant similarities with the Bitcoin blockchain.

Transactions are appended in both networks via a proof-of-work consensus mechanism. The proof-of-work consensus is a computational exercise undertaken by the participants of the Ethereum network to create new blocks of transactions via a process called mining. In Ethereum, two kinds of accounts can be created. The first is called an externally owned account(EOA), which is similar to a bitcoin account that stores an amount of currency. Transactions between two EOAs is the same as a bitcoin transaction between two wallets. Ethereum has the second kind of account called a contract. A contract account stores the contract’s code and has its own data storage. A transaction from an EOA to another EOA transfers a quantity of Ether. A transaction to a contract account runs the contract code. The contract code has the ability to read the code, amount of ether, and write to its own storage. More importantly, the contract can send a transaction to another contract account. When a contract executes its code, it can create another contract as well.

When looking at using blockchain in the enterprise world, the very safeguards that ensure the integrity of public blockchain networks, bring about scalability problems.

All transactions, smart contract code (bytecode), and state are typically in the clear—visible to anyone who joins the network. This may be desirable in the cryptocurrency/public dApps world, but not in the enterprise world.

Large enterprises have become accustomed, over the last few decades, to building out the secure, reliable, high-performance infrastructure that they manage, to run their critical business applications and systems.

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September 4, 2019
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