The Infinite Machine

by Camila Russo

Ethereum isn’t only a network for its digital currency, ether. It’s meant to be the base layer for developers to build whatever application they can dream of, including issuing their own coin. All they had to do was push out a few lines of code and they could mint cryptocurrency and trade it

When a transaction is executed, it is broadcast to all the computers in the network for them to update their ledgers. Transactions are bunched together to form a block of data, and once that block runs out of space (1 megabyte right now), computers race to solve a complex mathematical puzzle to verify the transactions, seal the block, and record it on their ledgers.

You can think of the world as a free market anarchy where all the land is legitimately owned by 193 landowners that allow you to live on the land under certain conditions.”

“an overlay network of issuance of distinct instruments encapsulated in a design we call ‘colored coins,’” he wrote.

Blockchain technology would give people the capacity to rebuild society so that the individual could take control of his property, his identity, his destiny.

“Turing completeness” is a concept named after mathematician Alan Turing. Turing-complete machines are able to run any computer code. Bitcoin has a scripting language that supports some computation, but Ethereum’s Turing-complete language is designed to support anything a programmer could dream of, and still run in a decentralized way.

Ethereum is a proof-of-work chain, like Bitcoin, which means miners get ether as a reward for validating transactions.

The reason to separate gas and ether is so that computation costs can remain stable even as the price of the cryptocurrency fluctuates with supply and demand in the market.

One significant difference between Ethereum and Bitcoin is their record-keeping method. Bitcoin uses the Unspent Transaction Output model, or UTXO.

The balance on each Bitcoin account is composed of unspent coins left over from other transactions.

Ethereum uses the Account/Balance model, which keeps track of the total balance, or “state,” of each account. If Bitcoin’s UTXO model is similar to bills and coins, Ethereum’s model is more like a checking account, allowing for fine-grained control over the amount that can be withdrawn, and making more complex programs easier to implement.

In Ethereum, there are two types of accounts: externally owned accounts, controlled by people’s private keys and containing no code, and contract accounts, controlled by their code.

He put together PowerPoint presentations and videotaped himself talking over them. After a month he had about ten classes ranging between thirty minutes to two hours, and put them all up for free on Udemy,

an online platform. The course was called “Bitcoin or How I Learned to Stop Worrying and Love Crypto.”

The most notable research published was in two articles on LetsTalkBitcoin.com in September, where Dan and Stan presented the concept of a Distributed Autonomous Company, which also came to be known as a Decentralized Autonomous Organization, or DAO—a

“It will be so powerful you’ll be able to build anything that can conceivably be built,” Vitalik said. “The inventors of JavaScript never intended for someone to build Gmail, or Facebook or Bitcoin wallets on top of it.

While Bitcoin was digital money, he understood that Ethereum could be digital anything.

How many cofounders should a startup have? One founder is usually frowned upon by venture capitalists, wary of a big ego that goes unchecked. Two founders are more common, three founders are fine, four is stretching it, and more than that is considered unwieldy and chaotic.

ether was much like a stamp needed to send a letter, or like the name “gas” suggests, like gasoline needed to fuel a car. He was thinking about these things one day walking along the leafy roads in his Long Island neighborhood when an idea started to form: Nobody would ever think of stamps or gasoline as securities. They’re goods, which have market prices, and can be bought and sold. Ether is pretty much the same. It’s a good that can be bought and sold. It’s made to serve a function on the Ethereum platform, not to be an investment, even if it’s sold in a process that may look a lot like an offering.

Web 3 was first coined in a 2006 New York Times article referring to a third-generation internet. This new internet is made up of concepts including the “semantic web,” or a web of data that can be processed by machines, artificial intelligence, machine learning, and data mining. When algorithms decide what to recommend someone should purchase on Amazon, that’s a glimpse of Web 3.

Bitcoin was both the cryptocurrency and the underlying blockchain and that Ethereum wasn’t like email. It wasn’t an application. Instead, it was intended to be a base protocol for many projects, like the internet.

the premined ether was issued, miners would generate new ether initially at an annual rate of 26 percent of the amount of ether issued in the crowdsale—the issuance rate isn’t fixed and is capped at 18 million ETH minted per year. That means that the supply of ether would grow over time but at a decreasing rate. The increasing supply means that large holders’ stakes will gradually decline relative to the total supply and ownership will tend to be more decentralized,

Wayne Hennessy-Barrett was founder and CEO of 4G Capital, a mobile money fintech business based in Kenya.

having a Turing-complete computer and the ability to run smart contracts increases flexibility but compromises on security.

proof-of-work is one kind of consensus algorithm, and consensus algorithms are how distributed systems decide, without the need of third parties, which blocks of data should be included in the chain.

proof of stake (PoS), where miners vote on which blocks to include and receive rewards in proportion to the coins they hold, not according to the energy they spend. In PoS, miners are called validators.

“Slasher,” an algorithm that guarantees miners would lose their block rewards if they’re mining on different chains at the same time.

Maker’s so-called Collateralized Debt Positions, or CDPs, also known as Vaults.