19ITC12 - BLOCKCHAIN TECHNOLOGY

Unit-III : Bitcoin And Ethereum

Bitcoin- blockchain, the challenges, and solutions, proof of work, Proof of
stake, alternatives to Bitcoin consensus, Bitcoin scripting language and
their use- Ethereum and Smart Contracts, The Turing Completeness of
Smart Contract Languages and verification challenges.

Bitcoin - blockchain
Bitcoin is a protocol which implements a highly available, public, permanent,
and decentralized ledger.
In order to add to the ledger, a user must prove they control an entry in the
ledger.
The protocol specifies that the entry indicates an amount of a token.
The user can update the ledger, assigning some of their bitcoin to another entry
in the ledger.

Fig : Official Logo of Bitcoin

Bitcoin transactions are verified by network nodes through cryptography and

recorded in a public distributed ledger called a blockchain.

The bitcoin blockchain is a public ledger that records bitcoin transactions. It is

implemented as a chain of blocks, each block containing a cryptographic
hash of the previous block up to the genesis block[c] in the chain.
A network of communicating nodes running bitcoin software maintains the
blockchain.
The Bitcoin network is a peer-to-peer network of nodes which implement the
Bitcoin protocol. The protocol itself implements a highly available, public, and
decentralized ledger. The nodes verify that each update to the ledger follows the
rules of the Bitcoin protocol.

Bitcoin Transactions
A Bitcoin Transaction happens when you send or receive a bitcoin. To send a
coin, you enter the receiver's address in your wallet application, enter your
private key, and agree to the transaction fee. Then, press whichever button
corresponds to "send."

The receiver must wait for the transaction to be verified by the mining network,
which can take up to 30 minutes because transactions wait in a mining queue
called the mempool.

Fig : Bitcoin Transactions

How Bitcoin Works
Bitcoin is a decentralized digital currency that operates without the need of
financial system or government authorities.
It utilizes peer-to-peer transfers on a digital network that records all
cryptocurrency transactions. This network is powered by the blockchain, an
open source code that pairs (or chains) blocks of transaction histories to prevent
manipulation.

These transfers are confirmed directly between users and are located on a shared
public ledger, Bitcoin eliminates the need for central facilitators, like
governments and banks, to verify currency transactions.

Bitcoin Mining
Mining is the process of validating transactions and creating a new block on the
blockchain.
Mining is conducted by software applications that run on computers or
machines designed specifically for mining called Application Specific
Integrated Circuits.
The hash is the focus of the mining programs and machines. They are working
to generate a number that matches the block hash. The programs randomly
generate a hash and try to match the block hash.

Making Sense Of Bitcoin

Blockchain is the technology that enables the existence of cryptocurrency
(among other things).
Bitcoin is the name of the best-known cryptocurrency, the one for which
blockchain technology, as we currently know it, was created.
A cryptocurrency is a medium of exchange, such as the US dollar, but is digital
and uses cryptographic techniques and it’s protocol to verify the transfer of
funds and control the creation of monetary units.
 The Challenges In Bitcoin

Bitcoin has come a long way in the eight or so years it's been in existence, but
there's still a long way to go before the digital currency becomes a widely used
method of paying for goods and services.

Here are seven of the biggest challenges facing mainstream adoption of

bitcoin.

1. Volatility
2. Ease of Use
3. Widespread Acceptance
4. Potential for Theft
5. Reputation for Criminal Activity
6. Tax Issues
7. Scalability

1. Volatility
This environment has made bitcoin extremely popular among speculators who
buy bitcoin hoping the price will continue to rise, but it isn't helping to fuel
bitcoin's popularity as a currency.

2. Ease of Use
User-friendly enough to encourage mainstream adoption. Currently, if the
average person wants to buy bitcoin, he or she needs to open an account at a
bitcoin exchange such as Coinbase, link a checking account (or credit card,
which generally comes with a higher fee), and in many cases wait several days
for the transaction to clear.

3. Widespread Acceptance
There are many retailers, particularly online, through which consumers can pay
for transactions in bitcoin, but the digital currency still isn't anywhere close to
being widely accepted.

4. Potential for Theft

Security measures exist that make bitcoin virtually impossible to steal, but
taking advantage of them involves a somewhat complex knowledge of how
bitcoin works and can often require significantly more effort on the part of the
user.
5. Reputation for Criminal Activity
Bitcoin became the natural choice for people who wanted to buy drugs, illegal
weapons, you name it. And to be fair, since it's an anonymous payment source,
it will be difficult, if not impossible, to fully solve this problem.

6. Tax Issues
If you buy bitcoin and then sell it for more than you paid, you'll need to report
the difference on your taxes.Keep detailed records of every bitcoin purchase and
transaction, risk getting into trouble with the use of bitcoin at all.

7. Scalability
The underlying technology behind bitcoin, the blockchain, limits the amount of
information that can be contained in each block to 1 megabyte of data. This
limitation allows for a maximum network capacity of about three transactions
per second.

Solutions in Bitcoin

Bitcoin is the first type of decentralized digital currency that has ever been
developed.
It is a type of currency that does not have any central bank or administrative
system that regulates it. Therefore all transactions completed with Bitcoin are
not monitored or verified by any entities.
The computers are all run by the same software and follow the same set of
protocols.
A technology known as blockchain serves as the public record of every
transaction that occurs via Bitcoin.
Bitcoin has emerged as a common currency that many businesses and
individuals now use, there have been efforts to develop software that will make
it easier to access and use.
Therefore, many organizations and individuals have begun to get software
developed so that they can take advantage of the many benefits that are offered.

1. Enabling of Transactions
2. Internet of Money
3. Improved Payment Processing
4. Safe and Easy Storage
5. Easy to Create Backup
6. Reduces Errors
 Proof Of Work

Proof Of Work: The network would have to be counterfeit-

resistant,provable and trust-free in order to solve the Byzantine General’s
Problem.
Bitcoin overcame the Byzantine General’s Problem by employing a Proof-of-
Work technique to create a clear, objective regulation for the blockchain.
Proof of work (PoW) is a method of adding fresh blocks of transactions to the
blockchain of a cryptocurrency. In this scenario, the task consists of creating a
hash (a long string of characters) that matches the desired hash for the current
block.
1. Counterfeit Resistant: Proof-of-Work requires network participants to
present proof of their work in the form of a valid hash in order for their block.
2. Provable: Once a block is uploaded to the blockchain, it is incredibly
difficult to erase, rendering Bitcoin’s history immutable.
3. Trust-free: If any network member attempts to broadcast misleading
information, all network nodes immediately detect it as objectively invalid and
ignore it.

● The PoW algorithm is one of the oldest types of consensus algorithms.

● The central idea of PoW is to have nodes solve complex mathematical
puzzles and make as many guesses as possible in the fastest possible time.

Proof of work is also a much slower validation method than other mechanisms.
For example, more transactions are taking place than the Bitcoin network can
handle.

proof-of-work, is the mechanism that once allowed the decentralized Ethereum

network to come to consensus (i.e. all nodes agree) on things like account
balances and the order of transactions. This prevented users from "double
spending" their coins and ensured that the Ethereum chain was tremendously
difficult to attack or manipulate.

Features of PoW

There are mainly two features that have contributed to the wide popularity of
this consensus protocol and they are:
It is hard to find a solution to a mathematical problem.
It is easy to verify the correctness of that solution.

Purpose of PoW

The purpose of a consensus mechanism is to bring all the nodes in agreement,

that is, trust one another, in an environment where the nodes don’t trust each
other.
All the transactions in the new block are then validated and the new block is
then added to the blockchain.
The block will get added to the chain which has the longest block
height(see blockchain forks to understand how multiple chains can exist at a
point in time).
Miners(special computers on the network) perform computation work in solving
a complex mathematical problem to add the block to the network, hence named,
Proof-of-Work.
With time, the mathematical problem becomes more complex.

Bitcoin’s PoW System

Bitcoin uses the Hashcash Proof of Work system as the mining basis.
The ‘hard mathematical problem’ can be written in an abstract way like
below :
Given data A, find a number x such as that the hash of x
appended to A results is a number less than B.
The miners bundle up a group of transactions into a block and try to mine. To
mine it, a hard mathematical problem has to be solved.
This problem is called the proof of work problem which has to be solved to
show that the miner has done some work in finding out the solution to the
problem and hence the mined block must be valid.
The answer to the problem needs to be a lower number than the hash of the
block for it to be accepted, known as the ‘target hash’

Challenges With PoW

The Proof-of-Work consensus mechanism has some issues which are as
follows:
The 51% risk: If a controlling entity owns 51% or more than 51% of nodes in
the network, the entity can corrupt the blockchain by gaining the majority of the
network.

Time-consuming: Miners have to check over many nonce values to find the
right solution to the puzzle that must be solved to mine the block, which is a
time-consuming process.

Resource consumption: Miners consume high amounts of computing power in

order to find the solution to the hard mathematical puzzle. It leads to a waste of
precious resources(money, energy, space, hardware). It is expected that 0.3% of
the world’s electricity will be spent to verify transactions.

Not instantaneous transaction: Transaction confirmation takes about 10–60

minutes. So, it is not an instantaneous transaction; because it takes some time to
mine the transaction and add it to the blockchain thus committing the
transaction.

Proof Of Stake

Proof-of-stake underlies certain consensus mechanisms used by blockchains to

achieve distributed consensus. In proof-of-work, miners prove they have capital
at risk by expending energy. Ethereum uses proof-of-stake, where validators
explicitly stake capital in the form.

Proof-of-stake comes with a number of improvements to the now-reject proof-

of-work system:

Better Energy Efficiency – there is no need to use lots of energy on proof-of-

work computations.
Lower Barriers To Entry - reduced hardware requirements – there is no need
for elite hardware to stand a chance of creating new blocks.
Reduced Centralization Risk – proof-of-stake should lead to more nodes
securing the network.
Proof of stake is a type of consensus mechanism used to validate cryptocurrency
transactions. With this system, owners of the cryptocurrency can stake their
coins, which gives them the right to check new blocks of transactions and add
them to the blockchain.

How does proof of stake work?

The proof-of-stake model allows owners of a cryptocurrency to stake coins and
create their own validator nodes.
Staking is when you pledge your coins to be used for verifying transactions.
Your coins are locked up while you stake them, but you can unstake them if you
want to trade them.
When a block of transactions is ready to be processed, the cryptocurrency's
proof-of-stake protocol will choose a validator node to review the block. The
validator checks if the transactions in the block are accurate.

Benefits of proof of stake

The PoS consensus mechanism offers several benefits to the cryptocurrency
platforms that support the approach, including the following:

1. Smaller resource requirements. The ability to add a node to the

blockchain, requires less computing power.
2. Lower energy utilization. With the need for less computing power
comes a corresponding decline in the amount of energy consumed in order to
validate a transaction.
3. Speed. A node can be added quicker with PoS, enabling faster transaction
throughput.
4. Scalability. The PoS-based approach has the potential to be more
scalable than PoW as the requirements and resources to have a stake may be
lower than the hardware and energy costs of PoW.

Challenges of proof of stake

While there are numerous benefits to using PoS, there are some challenges,
including the following:

1. Potential for undue influence. A key promise of cryptocurrencies is that

they are decentralized. With the need to stake coins, it is possible that a large
stakeholder could exert significant influence on the validation of transactions on
a blockchain network.
2. Staking conditions. With PoS, it is possible that the stake will be tied up
in a smart contract for a longer period.
3. Security concerns. There are concerns that PoS is less secure as there is
less effort required for validation and the potential for influence from large
stakeholders.
 Alternatives To Bitcoin Consensus

1. ETHEREUM (ETH)
2. BINANCE COIN (BNB)
3. CARDANO (ADA)
4. SOLANA (SOL)
5. POLYGON (MATIC)
6. AVALANCHE (AVAX)
7. UNISWAP (UNI)
8. LITECOIN (LTC)
9. CHAINLINK (LINK)
10. DECENTRALAND (MANA)

1. ETHEREUM (ETH)
Ethereum is a decentralized blockchain platform that works on a peer-to-peer
network that securely executes and verifies application code, called smart
contracts. In fact, Ethereum was the first smart contract platform in the crypto
world, and is heralded as the ‘second generation’ of cryptos.
2. BINANCE COIN (BNB)
Binance coin is a crypto issued by the Binance exchange and trades with the
BNB symbol, cerated by Changing Zhao, more commonly known as CZ.
Initially based on the Ethereum network, it has now shifted to its own
blockchain known as Binance Smart Chain.

3. CARDANO (ADA)
Cardano is a publicly accessible, open-source and decentralised blockchain
platform with a proof-of-stake consensus mechanism under the hood. It can
facilitate peer-to-peer transactions with its internal crypto token – ADA.
4. SOLANA (SOL)
It was one of the few blockchain platforms in the market that was able to deliver
extremely high transaction speeds with no loss of decentralisation at its core. It
is able to do so thanks to a bundle of new technologies including a consensus
mechanism known as proof-of-history.
5. POLYGON (MATIC)
Polygon, which was earlier known as the MATIC Network – is an Ethereum
token that powers the Polygon network – a scaling solution for Ethereum.
Polygon was started with the aim of providing faster and cheaper transactions
on the Ethereum blockchain network .
6. AVALANCHE (AVAX)
Avalanche is a blockchain network that describes itself as an open,
programmable smart contracts platform for decentralised applications. AVAX is
used to pay transaction fees and can be staked to secure the network.
7. UNISWAP (UNI)
Uniswap is a crypto exchange which uses a decentralised network protocol.
Uniswap is the name of the company that initially built the network. The
protocol is responsible for automated transactions between crypto exchanges on
the Ethereum blockchain through the use of smart contracts.
8. LITECOIN (LTC)
It was initially designed to address developer’s concerns that Bitcoin was
becoming too centrally controlled and hence it prevented other large-scale
mining firms to gain the upper hand in the mining process.
9. CHAINLINK (LINK)
Chainlink is essentially a crypto that aims to incentivise a global network of
computers to provide reliable, real-world data to smart contracts running on top
of blockchains.
10. DECENTRALAND (MANA)
Decentraland is one of the most popular metaverse tokens in the crypto space. It
is a 3D, virtual world, browser-based platform. Users can choose to buy virtual
plots of land on the platform.

Bitcoin Scripting Language And Their Use

Bitcoin's scripting language is called a stack-based language because it uses a

data structure called a stack.

A stack is a very simple data structure that can be visualized as a stack of cards.
A stack allows two operations: push and pop.

Push adds an item on top of the stack.

Pop removes the top item from the stack.

Operations on a stack can only act on the topmost item on the stack. A stack
data structure is also called a Last-In-First-Out, or "LIFO" .

The scripting language executes the script by processing each item from left to
right. Numbers (data constants) are pushed onto the stack. Operators push or
pop one or more parameters from the stack, act on them, and might push a result
onto the stack.

Transaction outputs consist of two parts:

● An amount of bitcoin, denominated in satoshis, the smallest bitcoin unit.
● A cryptographic puzzle that determines the conditions required to spend
the output.
The cryptographic puzzle is also known as a locking script, a witness
script, or a scriptPubKey.

Different Types Of Bitcoin Scripts

The five standard types of transaction scripts are :

1. Pay-to-public-key-hash (P2PKH)
2. Public-key
3. Multi-signature (limited to 15 keys)
4. Pay-to-script-hash (P2SH) and
5. Data output (OP_RETURN)

Basic ComponentsOf Bitcoin Scripts

● Software.
● Cryptography.
● Hardware.
● Miners(Gaming Theory)
Which of the following statements about the Bitcoin scripting language is
INCORRECT:

1. The scripting language is stack-based.

2. Every instruction can be executed multiple times.
3. Loops are not allowed in the Bitcoin scripting language.

The world is changing and developers are not perfect. The first iteration of any
software always has some flaws or shortcomings that need to be adjusted after a
while. For those two reasons, it is important to have a mechanism for change
management. In the case of APIs of central services, you typically have an API
version and a deprecation schedule.

Anatomy of a Bitcoin Transaction

New bitcoins are mined with every block that gets added to the blockchain until
about the year 2140.

Who has access to which bitcoin is determined by tracking unspent transaction

output (UTXO)
How Bitcoins are created
The first block of the blockchain is just defined in the code. All other blocks in
bitcoin need to have a “proof of work”.

This is a solution to an automatically generated mathematical puzzle that

makes clever use of hash functions. Solving this hash puzzle is computationally
intensive.

This means you need to have good hardware and invest a lot of time and
electricity to solve it.

People wouldn’t do that just for fun on the current scale. They do it, because of
the mining reward. This reward is given to every solved hash puzzle.

Bitcoin’s scripting language is simply called Script. All Bitcoin scripts are
written in Script. It is a simple language that is not Turing complete, meaning it
lacks several logical functions, including loops.

This is done to ensure that no Bitcoin script can consume inordinate computing
power and harm nodes on the network.

Script is used almost exclusively to lock and unlock bitcoin, not to build
applications or run programs.

Script’s simplicity also gives Bitcoin security and makes it easier for developers
to avoid losing money while designing wallets or applications on top of Bitcoin.

Uses of Bitcoin Scripting Language

The Bitcoin script language has several Uses and qualities, among which we
can mention:

1. It is simple and requires minimal processing.

2. Its functionality is limited, which provides greater security to the system.
 3. Being a Turing Incomplete language it does not have loops, so it is
ensured that the program stops repeating and ends. Thus, the possibility
of errors and malicious codes to the Bitcoin network is avoided.
4. Its simplicity allows it to be implemented on a wide range of devices.
5. There is no state before or after the script execution. All the information
necessary to run the script must be contained in it.
6. It is based on a stack and can use two types. One main and one
alternative. Where the latter is used for the storage of intermediate step
calculation data. In much the same way as the memory key on
calculators.
7. Bitcoin's scripting language is quite small. It can only contain 256
instructions, since each instruction is expressed in one byte.

Bitcoin Script Evolution

The Script language has been present in Bitcoin since its first version.
Analyzing the structure of digital payments, Satoshi Nakamoto, the developer of
Bitcoin, determined that a model was needed that would allow the machine to
determine whether transactions were made by spending exits successfully or
not.

In other words, it will be verified if the signatures were correct and if they
matched the public key.

This is one of the most studied problems in computing, determining whether

spending is successful or unsuccessful in order to avoid double spending. And
the solution to this was to use a machine that met certain established criteria.

In Bitcoin, it must always stop, so the implementation of a Turing Incomplete

language based on a stack system is ideal. Thus, the mechanism that manages
the Scripts in Bitcoin is very simple and safe.

Ethereumand Smart Contracts

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 immutable, 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.

Ethereum Architecture
Benefits of building on Ethereum
Ethereum offers an extremely flexible platform on which to build decentralized
applications using the native Solidity scripting language and Ethereum Virtual
Machine.

What is an Ethereum account?

There are two types of accounts in Ethereum:

1. Externally Owned Accounts (EOA):

An EOA is controlled by a private key, has no associated code, and can send
transactions.

2. Contract Accounts :
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 originate from an EOA.
Advantages of Ethereum
1. Decentralization
2. Rapid deployment
3. Permissioned network
4. Network size
5. Private transactions
6. Scalability and performance
7. Finality
8.Interoperability and open source
Disadvantages of Ethereum
1. Uses a Complicated Programming Language
2. Issues with Scaling
3. Ethereum Investing Can Be Risky

What are Smart Contracts?

Smart contracts are a self-operating computer program that automatically
executes when specific conditions are met.With smart contracts, you can share
anything of value, among strangers in a conflict-free transparent way.
A "smart contract" is simply a program that runs on the Ethereum
blockchain. It's a collection of code (its functions) and data (its state) that
resides at a specific address on the Ethereum blockchain.

Smart contracts are a type of Ethereum account.

This means they have a balance and can be the target of transactions. However
they're not controlled by a user, instead they are deployed to the network and
run as programmed.

User accounts can then interact with a smart contract by submitting transactions
that execute a function defined on the smart contract.

Why We Need Smart Contracts?

We can automate many solutions by writing a contract on a Blockchain to make
things simple and efficient. let’s compare and evaluate how smart contracts are
better than traditional contracts.

Uses of Smart Contracts :

1. Healthcare Industry
Patient Data Management: When it comes to patient data management, there
are two main issues in the healthcare industry:

● First, each patient is unique, therefore access to complete medical

records are essential in order to adapt the treatment and provide
personalized care
● Second,sharing information among the medical community is a major
challenge

Now, the above-stated issues can be resolved using smart contracts

functionality on blockchains.

2. Government voting system

Smart contracts provide a secure environment making the voting system less
susceptible to manipulation. Votes using smart contracts would be ledger-
protected, which is extremely difficult to decode.

3. Financial services
Smart contracts help in transforming traditional financial services in multiple
ways. In the case of insurance claims, they perform error checking, routing, and
transfer payments to the user if everything is found appropriate.

Smart Contract Advantages

Here’s what Smart Contracts give

Blockchain Platforms for Writing Smart Contracts

While Ethereum is the most popular platform for writing contracts, it is not the
only one. The following are some of the other platforms used for writing smart
contracts:

Bitcoins: Bitcoin uses Script that has limited capabilities when processing
documents. The Scripts are specifically designed to process Bitcoin
transactions.

Hyperledger Fabric: In Fabric, Chaincode is programmatic code deployed on

the network, where it is executed and validated by chain validators together
during the consensus process.

NXT: It’s a public blockchain platform that contains a limited selection of

templates for smart contracts. You have to use what is given, you can’t write
your own code.

Side Chains: Side chains enhances Blockchains performance and privacy

protections. They also add capabilities like smart contracts, secure
handles, and real-world property registry.

Tools for Writing & Deploying Smart Contracts

1. Mist Browser – It is a tool to browse and use dApps. It is a separate

browser that can be used to browse dApps and interact with them.
2. Truffle Framework – Truffle is a popular development framework for
Ethereum. It has built-in smart contract compilation, linking, deployment,
and binary management.
3. Metamask – MetaMask is a bridge that allows one to visit the distributed
web of tomorrow in their browser today. It allows users to run Ethereum
dApps right in their browser without running a full Ethereum node.
4. Remix – Remix is a web browser based IDE that allows users to write
Solidity smart contracts, then deploy and run the smart contract.

Applications of Ethereum Smart Contracts?

Through its ground-breaking combination of features like smart contracts
Ethereum is used for a variety of innovative applications :
1. In finance
2. Web browsing
3. Gaming
4. Advertising
5. Identity managementand
6. Supply chain management.

The Turing Completeness of Smart Contract Languages

and verification challenges.

Turing completeness refers to the idea that given infinite time, any program in
one language could be written in another.

In Ethereum, Turing complete means using conditional statements and loops to

program smart contracts.

Blockchain Technology, Turing completeness is a term in computer science that

describes the ability of a system to compute any possible calculation or
program, and can be used to describe modern programming languages (Python,
C++, etc.)

Ethereum is a cryptocurrency built with Turing completeness in mind.

● Since it relies on programmable smart contracts, Ethereum is not reliant on

third-party services to function.
● This means that, one could buy a house or make other major purchases on
the Ethereum blockchain through the use of a smart contract.
● However, there are concerns regarding whether or not this is feasible due to
the high costs associated with Turing complete systems and their ability to
run continuously without human intervention.

Impact of Turing Completeness On Cryptocurrency

● It is responsible for ensuring that a cryptocurrency can be used in everyday
transactions because it must be compatible with traditional banking services.
Turing completeness is a characteristic of a programming language.
● A language is Turing complete if it can be used to simulate a Turing
machine, which means that an appropriately designed program can solve
any problem that a Universal Turing Machine (UTM) can solve.
● In order for this to be feasible, programs must be free from restrictions, such
as halting and infinite loops.
● Turing’s completeness enables the development of highly advanced
programs in one language and allows other projects or companies to create
highly advanced applications using the same tools.

● Smart contracts are being used for all kinds of applications including
common transactions like payments, buying a car, or even licensing music
or software.

● Smart contracts can be used in an efficient way to run state channels

between users and to make payments transparently.

List of Smart Contract Programming Languages

● Solidity (Ethereum and other EVM-compatible chains)
● Rust (Solana, Polkadot, NEAR, and others)
● Vyper (Ethereum and other EVM-compatible chains)
● Yul and Yul+ (an intermediate language used for the Solidity compiler)
● JavaScript(NodeJS) (Hyperledger Fabric, NEAR)
● C++ (EOS)

● You can use different programming languages like Solidity, Web Assembly
and Michelson to create a smart contract.
● Every network computer (or node) stores a copy of all existing smart
contracts, their current state, and transaction information.
● Smart contracts receive funds from users, and the nodes in the network
execute the smart contract code to reach a consensus on the outcome.
● Smart contracts run securely without a central authority, even when users
make complex financial transactions with unknown entities.
● A system has to be Turing complete in order to be useful in blockchain, but
it can have all the other desirable properties of a blockchain, such as
decentralization and trustless transactions.