UNIT – 4

Ethereum:
• Ethereum is a decentralized blockchain platform that enables the creation and
execution of smart contracts, which are self-executing contracts with the terms of the
agreement directly written into code.
• Smart contracts allow participants to transact with each other without a trusted
central authority, and transaction records are immutable, verifiable, and securely
distributed across the network.
Ethereum's native cryptocurrency is called Ether.Key features of Ethereum include:
1. Smart Contracts: Ethereum supports the development and execution of smart
contracts, which can be used for various purposes, such as decentralized applications,
digital content distribution, and escrow services
2. Ethereum Virtual Machine (EVM): 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, ensuring that the
code is executed consistently across the network
3. Proof of Stake: Unlike Bitcoin, which uses a proof of work consensus mechanism,
Ethereum transitioned to a proof of stake system in 2022, reducing its energy
consumption and improving its sustainability
4. Enterprise-grade Programming Language (EPL): Ethereum's primary programming
language is EPL, a Turing-complete, global, and universal programming language that
supports the development of complex smart contracts.
IOTA:
• IOTA is a distributed ledger technology and cryptocurrency designed for the Internet
of Things (IoT). It uses a directed acyclic graph (DAG) called the Tangle to store
transactions on its ledger, which is motivated by a potentially higher scalability over
blockchain-based distributed ledgers.
• Unlike traditional blockchain networks, IOTA does not use miners to validate
transactions. Instead, nodes that issue a new transaction on the network must
approve two previous transactions, and transactions can be issued without fees,
facilitating microtransactions
Some key features of IOTA include:
1. Scalability: IOTA's Tangle is designed to be more scalable than traditional blockchain-
based distributed ledgers, allowing for faster and more efficient transactions
.
2. No Transaction Fees: IOTA transactions do not require transaction fees, making it
ideal for micropayments and other small transactions
3. Designed for IoT: IOTA is designed to be used in the IoT ecosystem, where devices
need to communicate and transact with each other securely and efficiently
4. Consensus Mechanism: IOTA currently achieves consensus through a coordinator
node, operated by the IOTA Foundation. The coordinator issues zero-value
transactions at given time intervals, called milestones, and any transaction, directly or
indirectly, referenced by such a milestone is considered valid by the nodes in the
network

The real need for mining:

• The real need for mining in blockchain, particularly in the context of cryptocurrencies
like Bitcoin, is to secure and verify transactions.
• Mining involves the process of adding transaction records to the blockchain, which is
essential for processing transactions and ensuring the integrity of the network.
• Additionally, mining is crucial for preventing double-spending of digital currency and
for generating new coins as a reward for miners' work in securing the network.
• The mining process also plays a vital role in maintaining the decentralized nature of
blockchain networks.
• While the energy-intensive nature of mining has raised concerns, it remains a
fundamental component of many blockchain systems. Some cryptocurrencies are
exploring alternative consensus mechanisms, such as proof of stake, to reduce
reliance on mining as an incentive for network security
Consensus:
• Consensus in blockchain refers to the process of achieving agreement, trust, and
security across a decentralized computer network.
• It is a crucial part of how transactions are processed and settled in a blockchain
network. Consensus mechanisms are protocols that bring all nodes of a distributed
blockchain network into agreement on a single data set, ensuring the integrity and
security of the network.
• In the context of blockchains and cryptocurrencies, two of the most prevalent
consensus mechanisms are proof-of-work (PoW) and proof-of-stake (PoS). PoW, used
by Bitcoin, requires computational power to solve a complex mathematical puzzle,
while PoS, used by Ethereum, relies on validators who are chosen to create new
blocks based on the number of coins they hold and are willing to "stake" as
collateral.
• These consensus mechanisms play a vital role in securing information, preventing
double spending, and maintaining the decentralized nature of blockchain networks.
Byzantine Generals Problem:
• The Byzantine Generals Problem is a game theory problem that describes the
difficulty of achieving consensus in a decentralized network where no participant can
verify the identity or reputation of others. It is an abstract expression of the problem
of dealing with failures in a distributed system.
• The problem is that multiple generals besiege Byzantium, and they must agree on a
course of action, but they cannot verify the identities of other members.
• The solution to the Byzantine Generals Problem is to find a way to ensure that a
sufficient number of generals are honest and will lead their regiments into the attack.
• In the context of blockchain, the Byzantine Generals Problem is solved by using
consensus mechanisms such as proof-of-work (PoW) and proof-of-stake (PoS) to
ensure that all nodes of a distributed blockchain network agree on a single data set,
ensuring the integrity and security of the network
Consensus as a distributed coordination problem:
• Consensus in blockchain can be viewed as a distributed coordination problem where
nodes in a distributed system need to agree on a specific data value that is needed
during computation.
• This is a fundamental problem in distributed computing and multi-agent systems, and
it often requires coordinating processes to reach consensus.
• Examples of applications of consensus include agreeing on what transactions to
commit to a database in state machine replication, and atomic broadcasts.
• Real-world applications often requiring consensus include cloud computing, clock
synchronization, and opinion formation.
• Consensus mechanisms such as proof-of-work (PoW) and proof-of-stake (PoS) are
used to ensure that all nodes of a distributed blockchain network agree on a single
data set, ensuring the integrity and security of the network.
• Consensus algorithms for distributed systems have been an active area of research for
several decades, and they remain a milestone in the family of classical consensus
algorithms

Private or permissioned block chains:

Private and permissioned blockchains are two distinct types of blockchain networks, each
with its own characteristics and use cases.
Private Blockchain:
• A private blockchain is a type of blockchain where only a single organization or entity
has control. It allows entry of only selected verified participants, and the operator has
the right to override, edit, or delete entries as required. In this type of blockchain, the
 participating parties need to be validated before joining the network and given
permission for writing or editing the blockchain.
• Private blockchains are usually the go-to choice of large enterprises that want an
isolated data where they can control who has access to the ledger.
• They prioritize efficiency and immutability and are not open to the public
Permissioned Blockchain:
• Permissioned blockchains, also known as private blockchains or permissioned
sandboxes, are closed networks in which previously identified participants, who are
sometimes members of a consortium, interact and participate in consensus and data
validation.
• They are partially decentralized and are controlled by a private group that authorizes
decisions. Permissioned blockchains are seen as more secure alternatives to public
blockchain systems and are preferred by those who need to define roles, verify
identities, and secure access within a network.
• They do not require the level of transparency of permissionless blockchains and are
often developed by private entities
Hyper ledger:
• Hyperledger is an open-source, global ecosystem for enterprise-grade blockchain
technologies, which aims to provide the necessary frameworks, standards, tools, and
libraries to build open-source blockchains and related applications for use across
various industries.
• It is a collaboration between global organizations and hosts the Hyperledger
Foundation, which supports and maintains the projects under its umbrella.
Some of the key features and benefits of Hyperledger include:
• Industry-specific solutions: Hyperledger offers a variety of enterprise-ready
permissioned blockchain platforms tailored to specific industries and use cases, such
as Hyperledger Fabric for business use cases
• Privacy and confidentiality: Hyperledger provides solutions for maintaining privacy
and confidentiality in transactions, which is crucial for certain applications like supply
chain management and healthcare
• Modular and interoperable: Hyperledger's blockchain solutions are modular and
interoperable, allowing businesses to apply various components to improve their
processes and systems
• Permissioned and secure: Hyperledger's permissioned nature ensures that only
authorized participants can join the network, and the data shared is secure and
private
• Real-world applications: Hyperledger's technologies are used by more of the top 100
public companies in the world than any other blockchain platform, showcasing its
practical applications in various industries
Token:
In the blockchain ecosystem, tokens are digital assets that allow information and value to be
transferred, stored, and verified in an efficient and secure manner. They can represent
various things, such as a store of value, digital or real-world assets, and securities. Tokens
are created on a blockchain, most often on Ethereum, and can be programmed with unique
characteristics that expand their use cases. There are two main types of tokens: fungible
and non-fungible (NFTs)
• Fungible tokens: These represent items that are interchangeable with one another.
An example of a fungible token is a cryptocurrency like Bitcoin, where each unit is
equivalent to the others
• Non-fungible tokens (NFTs): These are unique items, such as digital art, collectibles, or
real-world assets. No two NFTs are identical, and they cannot be exchanged for equal
value with other NFTs

Campus coin:
• CampusCoin (CC) is a decentralized cryptocurrency that aims to be used by college
students worldwide for instant transactions between peers at their schools.
• It is a cryptocurrency with its own blockchain, independent of other
cryptocurrencies.The CampusCoin Project is focused on facilitating the economic
transition to the blockchain with user-friendly applications and crypto-education.
• Some of the benefits of CampusCoin for students, parents, schools, and nearby
retailers include:
1. Quick and easy payments from a mobile device
2. Secure storage of funds
3. Rapid transaction settlement
 4. Financial tracking/data analysis using the blockchain
5. Reduced transaction costs
6. Fast payment processing
7. Simplified transaction data tabulation for sales
8. Sending money instantly to children, regardless of their location
9. Saving money for children's education
10.CampusCoin as a gift for various occasions
Coin drop as a strategy for Public adoption:
• The concept of "coin drop" as a strategy for public adoption in the context of
blockchain and cryptocurrencies is not widely discussed in the provided search
results. However, the term "coin drop" is often associated with a marketing strategy
known as "airdrops" in the cryptocurrency space.
• A cryptocurrency airdrop involves the distribution of free coins or tokens to the
wallets of existing cryptocurrency holders as a way to promote a new digital currency
or blockchain project
In the context of public adoption, a coin drop or airdrop can serve as a strategy to:
1. Raise awareness of a new cryptocurrency or blockchain project.
2. Encourage the use and adoption of a newly issued token.
3. Distribute tokens across a wide audience in a manner that would not have naturally
happened in an open market.
It's important to note that while airdrops can be a marketing strategy to promote adoption,
they may also pose security threats, and not all airdrops are associated with legitimate
projects
Currency Multiplicity:
• Currency multiplicity in the context of blockchain can refer to the existence of
multiple cryptocurrencies, as well as the emergence of non-monetary currencies,
such as social currencies, which are used to measure non-monetary values like
influence, reach, and authenticity.
• Blockchain technology has the potential to make these non-monetary social
currencies more trackable, transmissible, transactable, and monetizable, leading to
the emergence of social economic networks
Some key points related to currency multiplicity in blockchain are:
1. Cryptocoin multiplicity: This refers to the existence of multiple cryptocurrencies, such
as Bitcoin, Ethereum, and Litecoin, which operate on decentralized networks and use
blockchain technology for transaction processing and security.
 2. Complementary currencies: These are systems that operate within different types of
boundaries, such as non-convertibility or restrictions on convertibility.
Complementary currencies can be detached from the capitalist market, offering a
chance to achieve social and ecological goals
3. Local currencies: These are a type of complementary currency that can contribute to
social, economic, and environmental resilience by locally creating an alternative to
the dominant means of production, trade, and consumption
4. Social currencies: Blockchain technology can make non-monetary social currencies
more trackable, transmissible, transactable, and monetizable, enabling the creation
of social economic networks

Demurrage currency:
• Demurrage currency in blockchain refers to a type of cryptocurrency that loses value
over time at a fixed rate. Demurrage currencies aim to increase consumption by
discouraging hoarding and are not a novel idea, having been applied in the past,
notably during periods of economic unrest.
• Demurrage currencies are expected to experience a relatively high velocity of money,
due to the "hot potato effect" — everyone wants to pass on the money to someone
else before it loses value. This is said to be good because it stimulates economic
activity by encouraging people to spend or invest their money.
• Earth Dollar is an example of a blockchain-based demurrage currency that loses value
at a rate of 3.5% per year.
• The smart contract includes a provision for the currency's expiry date, and the smart
contract subtracts a specific percentage from the value of the currency at
predetermined intervals when a user gets demurrage cash.
• Depending on the demands of the currency's users, this deduction can be
programmed to happen daily, weekly, or monthly.
• Demurrage currencies can help ensure the currency's circulation as opposed to
hoarding, reduce the currency's volatility by reducing the incentive for people to
speculate on the price, and increase the utility of the currency and its adoption.