NAME :RISHABH PUNJ

ROLL NO:21736
SUBJECT-CRYPTOGRAPHY
 WHAT IS ETHEREUM
Ethereum is a decentralized blockchain platform that establishes a peer-to-
peer network that securely executes and verifies application code, called
smart contracts. Smart contracts allow participants to transact with each
other without a trusted central authority. Transaction records are
unchanging, verifiable, and securely distributed across the network, giving
participants full ownership and visibility into transaction data. Transactions
are sent from and received by user-created Ethereum accounts. A sender
must sign transactions and spend Ether, Ethereum's native cryptocurrency,
as a cost of processing transactions on the network.
More about Ethereum
 What is an Ethereum account?

1.There are two types of accounts in Ethereum: Externally Owned Accounts

(EOA) and Contract Accounts.
2. An EOA is controlled by a private key, has no associated code, and can send
transactions.
3. A contract account has an associated code that executes when it receives a
transaction from an EOA. A contract account cannot initiate transactions on its
own. Transactions must always originated from an EOA.
 How does Ethereum work for applications

• When a transaction triggers a smart contract, all nodes of the network

execute every instruction. To do this, Ethereum implements an execution
environment on the blockchain called the Ethereum Virtual Machine (EVM).
All nodes on the network run the EVM as part of the block verification
protocol. In block verification, each node goes through the transactions listed
in the block they are verifying and runs the code as triggered by the
transactions in the EVM. All nodes on the network do the same calculations to
keep their ledgers in sync. Every transaction must include a gas limit and a
fee that the sender is willing to pay for the transaction. Miners have the
choice of including the transaction and collecting the fee or not. If the total
amount of gas needed to process the transaction is less than or equal to the
gas limit, the transaction is processed. If the gas expended reaches the gas
limit before the transaction is completed, the transaction does not go through
and the fee is still lost. All gas not used by transaction execution is
reimbursed to the sender as Ether. This means that it's safe to send
transactions with a gas limit above the estimates.
 How can I pay for transactions on Ethereum?

• You can pay for transactions using Ether.

• Ether serves two purposes.
• First, it prevents bad actors from congesting the network with unnecessary
transactions.
• Second, it acts as an incentive for users to contribute resources and validate
transactions (mining). Each transaction in Ethereum constitutes a series of
operations to occur on the network (i.e. a transfer of Ether from one account
to another or a complex state-changing operation in a smart contract). Each
of these operations have a cost, which is measured in gas, the fee-measure
in Ethereum. Gas fees are are paid in Ether, and are often measured in a
smaller denomination called gwei. [1 ether = 1,000,000,000 gwei (10^9)]
 What is an Ethereum transaction?

• A transaction in Ethereum is a signed data message sent from one

Ethereum account to another. It contains the transaction sender and
recipient information, the option to include the amount of Ether to be
transferred, the smart contract bytecode, and the transaction fee the
sender is willing to pay to the network validators to have the
transaction included in the blockchain, known as gas price and limit.
 Advantages of Ethereum
• Ethereum enables the deployment of smart contracts and
decentralized applications (dApps) to be built and run without any
downtime, fraud, control, or interference from a third party.
• Ethereum Is Decentralised.
• Ethereum Continues To Attract More Businesses.
 Diasdvantages of Ethereum
• Low Scalability- Ethereum uses a Proof of Work (PoW) model, which
enables just 13 transactions per second (TPS) compared to its
enormous demand of 1.355 million TPS every day. This causes
network congestion and demands high transaction fees
• Ethereum’s native language, can be difficult. One of the primary
issues is that beginner-friendly lessons are difficult to come by.
Ethash Algorithm for Ethereum
 How does the Ethash algorithm work?
• A calculated seed is created using the block headers up to the point
where mining begins.
• This seed is then used to calculate and generate a 16 MB
pseudorandom cache.
• This cache is then used to generate a data set of more than 4 GB (the
DAG). This data set is semi-permanent and is updated every 30
thousand blocks. In this way, the DAG varies for each "mining season".
• Once the DAG is generated, mining begins. This process takes random
values ​from the DAG and combines them using the data supplied by
the network and the transactions to be verified.
• Finally verification is done with a process that regenerates specific
parts of the dataset using the cache memory, speeding up this process.
 What is Bitcoin ?
• Bitcoin is a digital currency which operates free of any
central control or the oversight of banks or governments.
• By mining, you can earn cryptocurrency without having to
put down money for it. Bitcoin miners receive bitcoin as a
reward for completing "blocks" of verified transactions,
which are added to the blockchain.
 Bitcoin Algorithm
• It uses cryptographic hash function SHA-256.
• SHA-256 (secure hash algorithm, FIPS 182-2) is a
cryptographic hash function with digest length of 256 bits.
It is a keyless hash function; that is, an MDC
(Manipulation Detection Code).
• A message is processed by blocks of 512 = 16 × 32 bits,
each block requiring 64 rounds.
 Basic operation of SHA 256
• Boolean operations AND, XOR and OR, denoted by ∧, ⊕
and ∨, respectively. • Bitwise complement, denoted by ¯. •
Integer addition modulo 232, denoted by A + B.
Each of them operates on 32-bit words. For the last
operation, binary words are interpreted as integers written
in base 2.
• RotR(A, n) denotes the circular right shift of n bits of the
binary word A.
• ShR(A, n) denotes the right shift of n bits of the binary
word A.
• AkB denotes the concatenation of the binary words A and
B.
Padding of SHA-256
To ensure that the message1 has length multiple of 512
bits:
• First, a bit 1 is appended.
• Second, k bits 0 are appended, with k being the smallest
positive integer such that l + 1 + k ≡ 448 mod 512, where l
is the length in bits of the initial message.
• Finally, the length l < 2 64 of the initial message is
represented with exactly 64 bits, and these bits are added
at the end of the message. The message shall always be
padded, even if the initial length is already a multiple of
512.
Block decomposition of SHA-256
• For each block M ∈ {0, 1} 512, 64 words of 32 bits each
are constructed as follows:
• First 16 are obtained by splitting M in 32-bit blocks M =
W1kW2k · · · kW15kW16
• The remaining 48 are obtained with the formula: Wi =
σ1(Wi−2) + Wi−7 + σ0(Wi−15) + Wi−16, 17 ≤ i ≤ 64.
What are advantages and Disadvantages of
Bitcoin
Thank you