This time the main talk was about Ethereum (tech and differences to Bitcoin) and a short demo of recently released DApps.

1. BlockchainHub Graz
Meetup #8
BlockchainHub Graz■ Thomas Zeinzinger■ Feb. 27, 2017

2. Thomas Max Sandra Tom Didi
Shermin Jean-Luc
Hannes
# Not-For-Profit
# Translate Blockchain to Non Techies
# Connect various Networks and Organizations

3. Get to know
each other
Find yourself a buddy!
My name is “_____”, and I
am interested in “_____”.
I am a:
1. Blockchain Tech newbie
2. Blockchain Tech intermediary
3. Blockchain Tech expert
I am here to:
1. Find someone who explains
Blockchain Tech to me
2. Socialize
3. Talk about a project
4. Search for investments
5. …

4. Collective
... getting things started
So – who was first?
Money Collective Project

5. Collective
Communication
Interested in the “lab10 collective“ or the “BlockchainHub“ – shoot a message
to graz@blockchainhub.net stating the e-mail address you would like to be
invited with.

6. Meetup – BlockchainHub Graz
NEWS

7. Bitcoin Unlimited vs. Segwit
NEWS
Status: 20.02.2017
Activation threshold is ≥1916 blocks (95% of last 2016 blocks)

8. Winklevoss brothers seek to launch
ETF (Exchange Traded Fund)
NEWS
Today ETF investors can
only access bitcoins
through a small allocation
in the ARK Web x.0 ETF
(ARKW), which obtains its
exposure through publicly
traded shares of
Grayscale’s Bitcoin
Investment Trust (OTCQX:
GBTC).
If launched, COIN would
list on Bats, which owns
ETF.com.
Next decision by SEC:
March 11th, 2017
100 Mill. $

9. Swift reveales “real-time” x-border
transactions
NEWS
As part of the formal rollout, Swift (or the Society for Worldwide Interbank Financial
Telecommunication) revealed that 12 of the world's largest banks have been conducting real-
time transactions via its Global Payments Innovation (GPI) project for some months.
As of early this morning, initial GPI users – a group that includes the Bank of China, BBVA, Citi,
ING Bank and Standard Chartered – will have conducted "tens of thousands of transactions"
between 60 country corridors, Raymaekers said.
Instead of rebuilding Swift's cross-border payments infrastructure from scratch, the GPI has
been constructed as a set of business rules encoded on top of the existing infrastructure with
an eye to increasing speed, transparency and the traceability of transactions.
On top of those rules, Swift has further created a transaction tracking mechanism supported by
cloud computing, with a graphical user interface designed to show exactly where a payment will
be, should it get held up.
• Faster, same day use of funds
• Transparency of fees
• End-to-end payments tracking
• Remittance information
transferred unaltered

10. Regulation Activities
NEWS

11. Ethereum News
Dubbed Enterprise Ethereum, the project's founding membership is said to include major financial institutions, tech
giants and natural resources companies. According to sources, participating firms include JP Morgan, CME Group, BNY
Mellon, Banco Santander, Microsoft, Red Hat, Cisco, Wipro and British Petroleum, among others.
Blockchain startups BlockApps, Brainbot Technologies, ConsenSys, Nuco and Tendermint – as well as the
Ethereum Foundation, the non-profit that oversees its code creation – are also said to be involved.
NEWS

12. ... a little bit of history
1997: Adam Back proposed “hashcash“ incorporating proof-of-work to limit e-mail spam
and denial-of-service attacks.
1998: Wei Dai created “b-money“, Nick Szabo created “Bit Gold“ and Hal Finney
developed “RPOW”. All these cryptocurrencies used hashcash as their proof-of-work
algorithm.
2004: BitTorrent emerged – it is the most used Peer-2-Peer file sharing communication
protocol with approx. 250 million users per month.
2008: Bitcoin was introduced by Satoshi Nakamoto (identity unknown) with a paper called
“bitcoin: A Peer-to-Peer Electronic Cash System”.
2009: The first open source bitcoin client went live and mining of bitcoins started. By
definition there are only 21 million Bitcoin (BTC) possible.
2013: Ethereum was first described by Vitalik Buterin: “Ethereum: A Next-Generation
Cryptocurrency and Decentralized Application Platform”

13. Bitcoin
“Depending on your point of
view, you could see some
problems with Bitcoin.”
• Block Time
high variation, 10 min. average
• Finality
very long lead time, 6 blocks
• Consensus - PoW
security vs. waste of energy
• Governance
long consensus time, e.g. Segwit vs. BU
• Extensibility
very tough, scripting language
• Scalability
limited by protocol, ~ 280 kTx per day

14. Bitcoin – Ethereum Comparison
Block Time High variation, average 10 min. High variation, average 15 sec.
Finality 6 block confirmations, ≈ 60 min. 12 (25) block confirmations, ≈ 3 (6) min.
Consensus PoW, energy waste for security PoW for distribution, Plan: transition to PoS
Governance slow decisions, conservative actively developed, leadership
Scalability 3 Tx/s, Plan: payment channels 15 Tx/s, Plan: payment channels, sharding
Extensibility hard, simple scripting language simple, smart contract + EVM

15. Web 3.0 Platform

16. Ethereum – Devcon 0 / Berlin 2014

17. Ethereum Software Release Dates
Source: http://decentral.ca/wp-content/uploads/2016/03/infographic.jpg

18. Basic Differences Ethereum vs. Bitcoin
Ether
Ether – Main purpose:
• Cryptocurrency to run the state machine of Ethereum
• Cryptocurrency traded on exchanges

19. Basic Differences Ethereum vs. Bitcoin
Accounts
Externally Owned Accounts (EAOs)
simple „Accounts“
State: Balance
Contract Accounts
simple „Contracts“
State: Balance & Storage
State Objects
• has an ether balance,
• can send transactions (ether transfer or
trigger contract code),
• is controlled by private keys,
• has no associated code.
• has an ether balance,
• has associated code,
• code execution is triggered by transactions
or messages (calls) received from other
contracts.
• when executed - perform operations of
arbitrary complexity (Turing completeness) -
manipulate its own persistent storage, i.e.,
can have its own permanent state - can call
other contracts

20. Basic Differences Ethereum vs. Bitcoin
Smart Contracts
Smart Contracts are:
Ø pre-written logic,
Ø stored and replicated on a blockchain,
Ø executed/run by a network of computers
Ø and can result in blockchain updates
If blockchains give us distributed trustworthy storage, then smart
contracts give us distributed trustworthy calculations.
Source: https://bitsonblocks.net/2016/02/01/a-gentle-introduction-to-smart-contracts/

21. Basic Differences Ethereum vs. Bitcoin
GAS
Messages
• Inter-contract communication
• Messages are triggered by Transactions (defines GASPRICE)
• STARTGAS applies for the transaction and all subsequent computations
Transactions
• Signed Message from EOA (Externaly Owned Accounts)
• Signature Sender / Address Recipient / Ether transferred
• STARTGAS - is the amount of ”GAS" that the transaction assigns itself
• GASPRICE - is the fee that the transaction pays per unit of gas
Attention: Insufficient STARTGAS à pay miner / no state change

22. Basic
Differences
Ethereum vs.
Bitcoin
• “GAS“ limit defines transactions
per second
• Adjustment of “GAS“ limit with
every block
• Also used to counteract DDoS
attacks
Bitcoin
Ethereum
GAS limit can increse by 1+1/1024 with every block and
in the early olympic testnet it reached around 25tx/s.
Live View: https://ethstats.net/
Source: http://ethereum.stackexchange.com/questions/3308/how-do-
i-compare-the-scalability-capabilities-between-ethereum-and-bitcoin

23. Basic Differences Ethereum vs. Bitcoin
Consensus: GHOST Protocol
The modified GHOST (Greedy Heaviest-Observed Sub-Tree) of Ethereum
tackles two problems by including stale blocks:
• Network Propagation Time
• Miner Centralization
GHOST Protocol: http://www.cs.huji.ac.il/~avivz/pubs/13/btc_scalability_full.pdf
122
Source: https://genius.com/Ethereum-ethereum-whitepaper-annotated
123 124 125 126
A
123 124
B

24. Basic Differences Ethereum vs. Bitcoin
Mining
Ethash (Dagger – Hashimoto)
• ASIC-resistance
• Light client verifiability
Source: https://github.com/ethereum/wiki/blob/master/Dagger-Hashimoto.md
Mining Block Reward
• 5 ETH/Block
• 1/32 of Block Reward for every Uncle Block (max. 2)
• All ETH for transactions and EVM computation
Uncle Block Reward
• 7/8 of Block Reward à 4.375 ETH/Block

25. Basic Differences Ethereum vs. Bitcoin
Inflation
Source:
https://bitsonblocks.net/2016/10/02/a-
gentle-introduction-to-ethereum/

26. Basic
Differences
Ethereum vs.
Bitcoin
Merkle Patricia trees provide a
cryptographically authenticated
data structure that can be used to
store all (key, value) bindings.
Merkle Patricia Tree
Source: https://github.com/ethereum/wiki/wiki/Patricia-Tree

27. Bitcoin – Ethereum Comparison
Block Time High variation, average 10 min. High variation, average 15 sec.
Finality 6 block confirmations, ≈ 60 min. 12 (25) block confirmations, ≈ 3 (6) min.
Consensus PoW, energy waste for security PoW for distribution, Plan: transition to PoS
Governance slow decisions, conservative actively developed, leadership
Scalability 3 Tx/s, Plan: payment channels 15 Tx/s, Plan: payment channels, sharding
Extensibility hard, simple scripting language simple, smart contract + EVM

28. Block Time, Finality & Consensus:
Proof-of-Stake (Casper)
Proof-of-Work
(Ethash)
Proof-of-Stake
(Casper)
(1) Source: https://motherboard.vice.com/en_us/article/bitcoin-could-consume-as-much-electricity-as-denmark-by-2020
Bitcoin
Pessimistic
Szenario:
14 Gigawatts
of electricity by
2020 (1)
Casper tackles following issues:
• Energy Wastage
• Security
• Speed
Casper wants to solve problems with
“crypto economics”:
• 'nothing-at-stake' problem
• 'long-range-attack' problem
• 'bounding the griefing factor' problem
• 'repeated signing of finalized blocks'

29. Extensability: Example – ERC 20 Token
Can represent any asset, e.g.
local currency, voucher, 1 hour worth of
baby sitting, promise for a crowd funded
product, insurance policy, event ticket, …
Token standard ERC-20
Smart contract can implement
features like:
multi-party issuance control, asset
freezing rules, dependency on events in
the real world, ...

30. Scalability: Raiden (Payment Channels)
Developed by Brainbot Technologies AG, Berlin
Scalable: it scales linearly with the number
of participants (1,000,000+ transfers per
second possible)
Fast: Transfers are confirmed and final
within the fraction of a second
Confidential: Single transfers don’t show
up in the global shared ledger
Interoperable: Works with any token that
follows Ethereum’s standardized token API
Low Fees: Transaction fees can be 7 orders
of magnitude lower than on the blockchain
Micro-payments: Low transaction fees
allow to efficiently transfer tiny values
Raiden is implemented as an extension to Ethereum. A
Raiden node runs alongside an Ethereum node and
communicates with other Raiden nodes to facilitate
transfers and with the Ethereum blockchain to manage
deposits. It offers a simple API which makes it easy to
use Raiden in DApps.

31. Scalability: Raiden (Payment Channels)
Source: Lefteris Karapetsas - https://www.youtube.com/watch?v=JuVP4iDVkoQ&feature=youtu.be&list=PLaM7G4Llrb7wPiT2G75tj2JQr8qg6P5hi
• All balances are updated off-chain.
• Bidirectional – Two deposits
• Settlement is comprised of two
netted balances
• Each participant tracks both balances

32. Scalability: Blockchain Sharding
Known concept
Tradeoff: Security vs. Cost
Distributes the distributed
database

33. Exploring Ethereum - Statistics
50 kTx/d 4 Mill Gas Limit
Feb. 24th, 2017 Source: https://etherscan.io/charts
Approx. 23*109 Wei = 23*10-9 Ether

34. Exploring Ethereum - Statistics
https://ethereumwisdom.com/
https://etherchain.org/
https://www.ethernodes.org
https://ethstats.net/

35. Ethereum - DApps
http://dapps.ethercasts.com/

36. Use Cases – Ethereum Smart Contracts
INSURANCE
MESSENGER
IDENTITY
Today we demonstrate the following Ðapps:
SOCIALMEDIA

37. Follow us
blockchainhub.net/graz
blockchainhubgraz
@bchgraz
Thomas Zeinzinger
@leantom42
thomas zeinzinger