Recap: alt-coins

Bitcoin is a replicated state machine, the system moves within S States with I inputs producing O outputs. For Bitcoin, S is the set of UTXOs. For Namecoin, the state consists (name, value).

Ethereum’s goal was to implement this functionality in a general way by building a “consensus computer” expressed in a Turing-complete language.


State: Great arbitrary storage space, arbitrary code (isolated memory space), and account balance. Inputs: (address, input data) Transition: update storage and change account balance

Issues: process isolation ensured via signatures and resource consumption limits ensured by requiring a payment for everything.

An Ethereum block consists of merkle-like trees hashes – a tree hash of state (code, account balance, nonce, and storage) – a tree hash for updates which is a collection of transactions. Each transactions has a sender, money, Pid, and code. – a tree hash of receipts. Each transaction has a corresponding receipt. A receipt contains the final state, gas used, and log data. – Just like Bitcoin, all storage is public.


Ethereum has (externally owned) accounts controlled by a private key and contracts (Dapp).

Address of account = SHA3(public key)[:20]Adddress of dapp = SHA3(creator's address, nonce)

Both have account balance and a nonce. EOA has public key, Dapp don’t. Dapp has code, EOA don’t.

Message Format

(to, from, value, data, startgas, gasprice)

Three important message types:

  1. Payment: from:sender, to:recipient, sender, value:$, (value) optional: data, gas_price:transaction fee
  2. Contract call: to: contract address, from:sender, value:$, data: f(), args, start_gas: how much computation are you willing to pay for
  3. Contract create: to: null, from:sender, data: code, value: initial balance, start_gas: pay for contract creation

Note: Nonce goes up every sent transaction to prevent replay attack.


Code is written in Ethereum Virtual Machine (EVM) bytecode – RAM is 32-bytes (256-bit), and persistent storage is 32-bytes addressable (2256 bytes). All memory is initialized to 0. Ethereum call stack size is limited to 1024. Storage can be word-addresssable, each key is 256-bits in size. Features: crypto (SHA3), interaction with blockchain, send messages, logging/output. Missing features: No RNG or else txns are not reproducible. No floating points.

No one writes EVM code directly. Solidity (Javascript-like) is more popular now. Serpent (Python-like) is less popular. Mutan (C/Go-like) is under development, Visual Basic is under development as well.

Gas (transaction fees)

Every message specifies STARTGAS and GASPRICE. Current gas price is about 30 billion wei (3 * 10-8 ether). You pay start gas * gas price, deducted at the start. If you are out of gas, execution halts, state reverts but miner keeps the gas as the fee.

Contract creation = 32K gas ~ 0.01$
Storage ~ 0.005$ per word