Blockchain is considered to be the most disruptive technology since the birth of the Internet. Why and how charming it is, many people find it incomprehensible. In the field of blockchain, fans who follow blockchain often mention Ethereum and smart contracts, so what are they?
Since the development of the Internet, some people think that there are no more than 2,000 people on earth who are capable of independently developing blockchain applications, and some people think that there may be no more than 200 people. Although this figure may be exaggerated, it is enough to illustrate the difficulty of developing a blockchain. Because this is like developing an APP on a mobile phone without an operating system, you need to write code from the bottom, build the bottom structure, and you need to master a lot of software and hardware development capabilities and encryption algorithms. So, some people imagine that if someone provides an operating system similar to Android or iOS, the threshold for development can be greatly reduced. As a result, a group of programmers developed Ethereum, Chinese name: "Ethereum".
Ethereum is an open source blockchain underlying system, just like Android, it provides a very rich API and interface, allowing many people to quickly develop various blockchain applications on it. At present, more than 200 applications have been developed on Ethereum.
The biggest feature of Ethereum is the ability to implement smart contracts. The so-called smart contract (Smart Contract) is a series of promises (promises) defined in digital form first proposed by cryptographer Nick Szabo in 1994, including agreements on which contract participants can execute these promises.
The corresponding word of smart contract in English is Smart, which has the same meaning as Smart in Smart Phone, which means very flexible, not artificial intelligence (AI). Once a smart contract is set up, it can execute automatically without the participation of an intermediary, and no one can stop it from running.
The blockchain provides a trusted execution environment for smart contracts, and smart contracts extend the application of the blockchain. And smart contracts on Ethereum can control various digital assets on the blockchain to perform complex operations. As smart contracts begin to gain more and more use, people also find that, just like contracts in the real world, if If it is not carefully reviewed, there may be loopholes in it, which can be exploited by bad actors. A series of huge problems in TheDAO project made more people pay attention to the security of smart contracts.
TheDAO is a decentralized autonomous fund based on Ethereum. Everyone can use Ethereum to participate at any time. There is no centralized management organization, and it is collectively decided to invest in various blockchain projects. The project is in the spotlight as it raised more than $150 million in 28 days, making it the largest crowdfunding project in the world. However, due to loopholes in TheDAO's program, some funds were stolen by hackers, which made many people question the security of smart contracts and even the security of Ethereum.
In fact, as the event progressed, everyone began to realize that the DAO's smart contract writing had a loophole, not an Ethereum problem. This incident made everyone realize that smart contracts are like traditional contracts. If the content and execution process of the contract are too complicated, a role like a lawyer needs to be involved in the review. And once there are loopholes that are not found by review and are exploited by hackers, it may cause bad results. Just as we may never be able to ensure that all contracts are free of loopholes, it is impossible to conclude that the contract approach is useless. The same is true for smart contracts, but in the future, a group of professional people may be required to audit the code.