Trustless blockchain explorers

ELI5: What do we mean by “blockchains are trustless”?

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Preface — Following article that introduces the topic CryptoCurrency is intended for general audience. CryptoCurrencies are built over Blockchain Peer-to-Peer technology and sometimes, are depicted as threat to governments and banks. Many experts believe Blockchain will dramatically change the FinTech industry and bring transparency between providers and consumers.

Bank — A place we trust our money with and believe currency is safe. It is also a place which facilitates exchange of currency between two parties. The two parties can be inter-country or intra-country. The transaction process is smooth for inter-country but not as smooth for intra-country. One of the reasons of this friction is that every country has their own currency and the exchange needs to happen at an exchange rate.

When the exchange of value or a transaction is between countries, an exchange rate must be figured out in order for the transaction to take place. Exchange rates value vary drastically for each pair of countries.

Without going into much detail it can be said that the value of any national currency depends on its goods and services exports. The more quality and quantity exported, the more valuable the currency becomes, because other countries need to first buy the currency itself to buy these exported goods and services.

Higher the demand, lower the supply, higher the price. Lower the demand, higher the supply, lower the price. Forex markets keep these prices roughly stable by constantly trading currencies against one another. Hence an exchange rate helps in trading goods and services across borders. Banks need to stay abreast of foreign exchange rates. Essentially, the forex market exists because of no global standard currency. There are some fungible items like Gold that can be used globally but they are not easily divisible, quickly transferred to far distances and there is a no known limit of its supply.

The reason — unknown supply. If some country gets lucky and finds a large ore of Gold, it can destabilize global economics and in turn governments. So far we know that each nation has its own government backed currency which is handled in a trusted manner by banks. Without banks, no two parties can exchange value for goods and services in a provable manner that the exchange happened.

Cash is a mechanism where exchange of value can take place but because of its anonymous nature, it is discouraged and the exchange is not backed by government. Bank accounts and bank transfer became the standard option for people to transfer value in a provable manner. They can freeze accounts, stop transfers or worse, make anyone a beggar. Apart from these evil possibilities, banks are not hack-proof. Theft of money from bank becomes a burden for honest members of the bank or community.

Demonetization did more harm than good to honest members of the bank. Technologically, we can consider bank as an online database which can be tampered, with or without permission. It is a trust-required setup without an ability of verifying its overall integrity by any account holder. Blockchain — We can consider blockchain as an online replicated database which can not be tampered, it is also verifiable by any account holder.

Blockchains allow a trust-less exchange of value that cannot be censored, linked to individuals and is same within or across border.

There are permission-ed or permission-less blockchains which allow any or selected members to append new records. Each set of records is clubbed into a block and a signature is created of that block. The next block refers to the previous block and its signature. With each such block, a block chain is created and distributed across the nodes. A node in block chain is an online computer that maintains a full copy of blockchain. Every node can verify integrity of the blockchain on its own.

When a transaction is announced by account holders — using their wallet, it is broadcasted to all available nodes. These nodes maintain such broadcasted transactions in a mempool which they try to include in the next block. Nodes that successfully include the transaction into a block and append the block to blockchain, get rewards.

They also publish their block to all other nodes so that other nodes do not try to include same transactions in their next block. Mining — The process of including transactions from mempool to a block and appending the block to the blockchain is called mining. A node that does the work of mining is called miner. Mining is compute-intensive process where a signature needs to be calculated as per the rules of blockchain. Each blockchain has its own rules, and consensus between miners ensure that the rules are honored.

Those miners that do not honor the rules are rejected from pool and neither their blocks are accepted nor they are incentivized for mining. Open blockchains are permissionless, censor free and global. Users use them for these properties and pay a per transaction fee for letting the nodes accept and insert the transaction in blockchain.

Miners can also be incentivized by awarding some additional currency for doing their work. A work is finding next block in blockchain. Bitcoin — A cryptocurrency which works on a trust-less setup where anyone from anywhere can transfer value to anyone anywhere.

Miners mine the blocks from transactions in mempool and are rewarded in bitcoins. Miners can spend, send, exchange these bitcoins for a national currency and vice-versa. Many retail shops, online carts or entertainment places accept bitcoin as form of payment. Miners generally sell bitcoins on exchanges for real-time rate. Each transaction is appended on blockchain for immutability. Fees and block rewards. This generally results in blocks getting created faster.

Bitcoin has limited supply defined in its code. Because of this engine, bitcoin block generation speed is roughly limited to 1 block per 10 mins. This difficulty is recorded in the block itself and denoted number of zeros in signature hash prefix. The signature hash is calculated using SHA This difficulty engine also makes it difficult to perform a network attack.

A network attack on bitcoin is where miner s maliciously force an invalid transaction to be appended in blockchain. Users use wallets to initiate transactions and accept bitcoins. A user can own multiple accounts on bitcoin blockchain. An account is a combination of public-private key pair. Public key is the address where bitcoin is sent and is publicly disclosed address. Private key is used by wallets to sign the transaction and is always kept private.

Anyone who possess the private key has access to the amount of bitcoins on the corresponding public key. Bitcoin successfully demonstrates use of blockchain as a mean of censorship-free global value transfer using PKI. CryptoCurrencies — Looking at the problems in banking system and success of Bitcoin Blockchain, a lot of open source projects spun from it in an effort to address its limitations.

Some increased the number of coins thereby increasing the total supply. Some changed the signature algorithm from SHA to another. Some felt that the 10 min block time was too high to make instant payments e. Paying for a Coffee, and hence reduced the block time or created master-nodes that can instantaneously verify transactions. Each cryptocurrency came with tradeoffs in terms of security, speed, size of blockchain, censorship, etc.

Some created privacy focused blockchains which mangle the mempool and hide the identity of value exchangers. These privacy focused chain allowed to view amount of coins stored on each address but hid or mangled the transactions that occurred. Unlike fiat which are divisible unto 2 decimal points, cryptocurrencies are divisible unto 8 decimal points. Thus, even though a single bitcoin costs USD, Satoshis are just 1 cent. This makes bitcoin and similar cryptocurrencies extremely flexible to pay from small tips to buying large mansions.

Cryptocurrency Payment Processors run nodes which always have latest blockchain copy. Small payments are usually instantly confirmed by these processors while large payments need certain amount of global confirmations to be absolutely sure that the transaction is immutable. Cryptocurrencies can be stored and carried in numerous ways. Most common is a hot mobile wallet application. People generally hold only enough in mobile wallet for daily needs.

These categories indicate the location and protection level of private key. Smart Contracts — In cryptocurrencies, the transaction once submitted to mempool had a relative guarantee to occur in few blocks time and time was the only constraint for transaction to happen.

Once a miner mines that transaction into a block, other miners give consensus by confirming the block and appending it to their local blockchain. Smart contracts on the other hand are bound to not only time but also the conditions mentioned in contract.

These conditions can be any such that the contract stays binding. Smart contracts enabled a lot of decentralized apps to be created on these platforms. Usually the platform itself also acts as a native currency and each contract execution is paid in that currency. Smart contracts can represent any real world contract on blockchain database in an immutable fashion. The history of the contract execution cannot be altered and it can always be proven that the contract happened.

Real world representation can be shares of a company, land records, employment records, bank bonds.

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We believe in relentless evolution of systems and societies. A network of state channels enables the exchange of value with anybody in the world in a trustless way. Participants interact privately with each other. Businesses have their records off-chain and not in public. Participants have infinite almost instant transactions. Participants can handle use cases that require very high volumes of transactions. State channels make it possible to execute smart contracts off-chain.

Only in case of a disagreement between the contracting parties does the smart contract code get enforced by the blockchain.

Consensus is achieved via a novel Proof-of-Work PoW algorithm. Even smartphones can mine, achieving unparalleled decentralization. Proof-of-Stake PoS is used for governance, which is done via delegated voting, weighted by the amount of tokens the account holds.

It is essential to note that governance is very much a human problem that most likely cannot be "solved" purely by technical means. What if the fulfillment of a smart contract depends on weather conditions, a share price, or other public information from the real world? Oracles can provide tamper-proof data which contracts can act upon. Election results, the prices of assets such as gold, weather conditions and many other real-world values play a crucial role for many business applications.

An oracle connects real world data with smart contracts. For many business applications it's crucial to have transactions which are not recorded in public. Smart contracts executed in state channels touch the blockchain only in the case of disagreement, acting like a self-arbitrating crypto court.

State-of-the-art cryptographic datastructures and unparalleled decentralization provide efficiency and eliminate single-point-of-failure. Similar to mobile dominating the web today, we expect that an average user will be accessing blockchain from her mobile device. Visit our aepps Portal for selected aepps and aepps Tools for aepps development tools.

How about crowdfunding using dominant assurance contracts? These specific smart contracts can be used to raise money for your projects and, at the same time, secure contributors against failure. If a project is unsuccessful, all participants get their contributions back. In the blockchain ecosystem gaming is a huge, steadily growing industry.

The advantages are obvious. Users are in full control of their in-game transactions, which means fees are kept to a minimum with no intermediaries. A fraud resistant network and irreversible transactions provided by blockchain technology deliver trustless and secure interactions.

Infinite scalability, instant payment functionality and Oracle feeds enable us to automate financial transactions, which involve large amounts of parameters with any number of concurrent users. This allows for new ways to fund projects or even governments. A system, in which the funding is only unlocked upon completion of one or more selected events. Additionally, funds can be unlocked, only if the outcome, which is to be reached with the funding, is resolved by an Oracle or voting.

The ability to exchange tokens is an essential part of a thriving ecosystem, providing for efficient cooperation and transfer between different blockchain projects. Payments go through instantly, while retaining your privacy.

You heard that right, instantly! Imagine banking for the unbanked, content monetization, paid API calls, decentralized live video streaming and a lot more. Having exchanged ideas and pursued blockchain endeavors with many of the greatest minds, Yanislav is a true veteran of the blockchain space. The " Godfather of Ethereum " envisioned in to have powerful algorithms on blockchains.

Being intrigued by the magic of blockchain technology since early , Marion is especially interested in connecting the dots between technology and the growing community. As the founder of a publishing media company proud , a Restaurant Beuster and two tech start-ups: Dropspot and Abend 30 employees , Emin has been an active entrepreneur since Within the blockchain space he is an early adopter, an ex-Bitcoin miner, and investor in Ethereum. Sergei Evdokimov has studied Math and Cryptography.

He got his PhD in Berlin researching the area of provable security. Before joining AEternity he was working as an IT Architect designing distributed systems for managing medical records of millions of patients and building scalable AI-based recommendation systems for major publishers.

He also stays connected to the academia by teaching Security and Data Science cources at the university. He has developed and consulted numerous international projects for almost a decade and has recently been introduced to the unlimited possibilities of blockchain technologies.

Erik has been programming for fun since , and for profit since , when he started his first development company. Erik built up the Engineering Department at Klarna from the start. In his limited spare time he is writing a book about the Erlang Runtime system.

Thomas is a senior scientist and Erlang expert. He worked together with Joe Armstrong, the inventor of Erlang, at Computer Science lab in the 's. He holds over 20 year of experience in programming Erlang, as well as strong scientific experience, accompanied by an ability to read and understand scientific papers in theoretical computer science.

Thomas has the ability to translate scientific theory in practical applications. He is one of the main developers of the QuickCheck testing tool. Hans has more than 15 years experience in Erlang programming. He is the author of multiple libraries with concurrency as the theme.

He holds a PhD in testing leader election protocols. Hans is an Expert in model checking concurrent programs. He is a QuickCheck expert: Tested SSL, Riak, automotive protocols, telecom protocols and distributed systems. He implemented semantics of Erlang and knows the VM corners. Ulf is an expert programmer and the brain behind the Agda programming language. He has over ten years experience in Erlang. He holds a PhD in computer science and is an expert in reading scientific papers, understanding the concepts in them and implementing them in any language.

Hughes is a member of the Functional Programming group at Chalmers. He does research in the field of programming languages and is the author of many influential research papers on the subject, including "Why Functional Programming Matters".

Sascha began programming 20 years ago and has spent the last 10 years working as a software engineer and lead architect. He was introduced to Bitcoin in and was immediately captivated the diverse range of fields converging in blockchain technology.

He has been absorbing as much knowledge as possible about blockchains and decentralized systems ever since. Michal is a hands on engineer with a track record in the hottest projects of the last few years. He has been responsible for the architecture, scalability and performance in systems behind RTB markets, Mobile Chat apps, and IoT systems that run for hundreds of millions customers.

He will support our effort to use Erlang technology in order to deliver a state of the art blockchain. Phillipp is a long time blockchain enthusiast and software developer. He loves bringing his passion and knowledge into developing scalable and innovative solutions, as well as educating others about blockchain technology.

Ulf Wiger became one of the first commercial users of Erlang when he bought a license in In , he joined Ericsson and became Chief Designer of the AXD development, arguably the most complex system ever built in Erlang.

In recent years, Ulf has been involved in products based on the AXD architecture, and has been an active member of the Open Source Erlang community. He is currently working on the aeternity Blockchain. Tobias is an Erlang expert with experience ranging from architecting and implementing large scale high availability systems to deep diving in the Erlang language implementation. Formerly a researcher in program language design and static analysis, at Klarna Tobias pushed the boundaries of what an Erlang system can do to keep up with extreme growth.

Tobias is a member of the core development team, implementing the Ethereum VM in Erlang to run Solidity contracts on the aeternity blockchain. Luca is a practical engineer keen on developing distributed software solutions that work. Dimitar is a software engineer with a variety of interests. He has seen the revenue generating machine from the inside and loves blockchain technology for its potential to disrupt and democratize finance. Digital marketing analyst and Bitcoin entrepreneur.

Co-Founder of the Bulgarian Bitcoin Association and the first website for bitcoin exchange in the country. Fascinated by technology, Bitcoin, blockchains and the future. Realizing app and web-app projects for companies like sony, telefonica, vw, montblanc in the past. Thrilled by the opportunity to make blockchain technology accessible for everyone.

Stoyan is a seasoned entrepreneur, whose specialty lies at the intersection of technology, design, and business.

Having worked on projects in San Francisco, New York, Los Angeles, and Berlin, Stoyan is lured by the disruptive potential of blockchain technology and its implications for globalization. Shaleah brings the technical and the practical together. Specializing in content optimization and branding development for small international businesses, she has spent the last 8 years bringing services, products and ideas into being by putting them into words.

Alessandro De Carli is a mobile security engineer with years of experience in the financial industry. He discovered the world of crypto during his master thesis in the area of state channels and micropayment protocols. He felt the pain of scalability during the implementation of a micropayment wallet and is excited about the potential of a scalable general purpose blockchain. Lukas is a senior backend engineer who studied at the Free University Berlin with a focus on Human-Centered Computing -- working on combining human and machine intelligence.

Prior to working as a backend engineer and system operator for a big data startup which included setting up the whole server infrastructure from scratch , he was building database and backend solutions for a Bank.

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