Controversy and questioning brought by Ethereum

From this point of view, the application scenario of Ethereum is more extensive, which is why we say that Ethereum marks a simple monetary system in the blockchain 1.0 era, and realizes the transformation of other industries and application scenarios in the blockchain 2.0 era.

However, there is no perfect thing in the world. Although Ethereum has expanded the application scope of blockchain in various industries and has also improved the speed of processing transactions, it also has certain controversy and doubts.

• If the miner is dissatisfied with the BCH incentive halving, it may cause cyber security problems.
• Ethereum price analysis on April 8
• Bitcoin price analysis on April 8

First, insufficient scalability

The biggest problem of Ethereum's ground floor design is that there is only one chain in Taifang, and there is no side chain. This means that all programs must run on this chain reciprocally, consuming resources and causing system congestion. Just like last year's very popular Ethereum game "Encryption Cat", when the game was hot, it once triggered the Ethereum network.

For the problem of improving processing power, Ethereum proposes two methods: one is shard technology, the other is lightning network, and the lightning network belongs to state channel.

(1) Fragmentation technology

Let us introduce the fragmentation technology first. Vitalik Buterin, the founder of Ethereum, believes that the mainstream blockchain network, such as Bitcoin, handles transactions very slowly because every miner has to deal with every transaction on the whole network. Efficiency is actually very low.

The idea of ​​fragmentation technology is that a transaction does not have to be sent to all nodes of the entire network to deal with, as long as a part of the nodes (miners) in the network are processed. As a result, the Ethereum network is divided into many pieces. At the same time, each slice can handle different transactions, which will greatly improve network performance.

However, the fragmentation technology is also controversial. We know that the important idea of ​​blockchain technology is decentralization, and the whole network goes to witness (process) the same transaction, which has the highest credibility. The Ethereum fragmentation technology is not witnessed by all nodes, but is similar to the sub-group witness, so that it loses the absolute "decentralization" attribute, only by sacrificing certain decentralization characteristics. To achieve high performance.

(2) Lightning network

In addition to the fragmentation technology, another solution to the problem of insufficient scalability and easy to cause transaction congestion is the lightning network.

The lightning network uses the way of trading under the chain. Participants using the lightning network do not need to confirm through the Ethereum main chain transaction, but create a payment channel between the participants and complete it under the chain.

However, the lightning network is not out of the main chain. Before establishing the payment channel, you need to use the assets on the main chain as collateral to generate Balance Proof. You can have a balance certificate to show that you can make the corresponding balance transfer. In the case where both parties to the transaction hold a proof of balance, the parties can make an unlimited number of transfers under the chain through the payment channel.

Only when the chain transaction is completed, the assets need to be transferred back to the chain, the balance change information of the main chain account will be registered in the Ethereum main chain, and no matter how many transactions occur during this period, there will be no records in the main chain. of.

Thunderbolt network has a real advantage, which can save you miners. At present, we are trading on the Ethereum main chain, we need to consume Gas, we need to pay the miners' fees, then we can save the cost of this part once the transaction is moved to the chain.

Of course, the lightning network is not perfect. First of all, when using the lightning network, it is necessary to use the assets on the main chain as collateral. This part of the assets is used as collateral and cannot be used until the user completes the chain transaction. This also determines that lightning trading is only suitable for small transactions.

The above is the problem of insufficient expansion of Ethereum, and the two main solutions proposed at present: fragmentation technology and lightning network. Then, after mentioning the fragmentation technology and the lightning network, you need to know that these two technologies are aimed at Ethereum and the solution to the problem of insufficient expansion of Ethereum.

Second, the smart contract vulnerability problem

Ethereum's smart contracts are very powerful, but there are loopholes in the code. The biggest controversy about the Ethereum smart contract lies in the so-called vulnerability, which is the security issue.

According to related research, 34200 (about 3%) of the nearly 1 million smart contracts based on Ethereum have been found to contain security vulnerabilities, which will allow hackers to steal ETH, freeze assets or delete contracts.

Here we talk about The Dao event, a notorious hacking incident about Ethereum.

Before the introduction, we will first see what DAO is. DAO is the abbreviation of Decentralized Autonomous Organization, which can be understood as: decentralized autonomous organization.

From an Ethereum perspective, DAO is a type of contract on a blockchain, or a combination of contracts that replaces government censorship and complex intermediate procedures to achieve an efficient, decentralized trust system.

So, DAO is not a specific organization, that is to say, there can be many DAOs, all kinds of DAOs.

However, we now refer to DAO, basically referring to The DAO incident, which is the notorious hacking incident we just said. Let's briefly talk about the "The Dao" event:

In 2016, Slock.it, a German company focused on “smart locks”, released the DAO project at Ethereum in order to achieve a decentralized physical exchange (eg, apartment, boat). And on April 30, 2016, the financing window was open for 28 days.

Unexpectedly, the popularity of this DAO project was very high. In just half a month, it raised more than 100 million US dollars. By the end of the entire financing period, it raised a total of 150 million US dollars. As a result, it became the largest crowdfunding in history. project.

However, the good times did not last long. In June, hackers successfully exploited the vulnerabilities in smart contracts and successfully transferred more than 3.6 million Ethereums into a DAO sub-organization, which has the same structure as The DAO. As a result, the price of the Ethereum fell directly below $13 from more than $20.

What does this incident mean? Explain that smart contracts are indeed flawed, and once the vulnerability is exploited by hackers, the consequences are very serious. This is why many people now criticize Ethereum and say that its smart contracts are not smart.

For this problem, many foreign companies are currently providing code auditing services, testing smart contracts through technology, and many teams have already invested in head offices.

Third, "centralization" hidden dangers

In addition to the current lack of scalability and smart contract loopholes in Ethereum, the controversy over Ethereum lies in the POS consensus mechanism it pursues, which is the equity proof mechanism.

Under the equity proof mechanism, if the number of holders of coins is larger and the longer the currency is held, the more “equity” (interest) is obtained, the opportunity to get the bookkeeping power, and the bookkeeping can be rewarded. As a result, it is easy to cause the oligopoly advantage of "the stronger the stronger."

Fourth, the ICO chaos problem

Another problem is the problem of ICO chaos. ICO is a common way to raise funds for blockchain projects, which we can understand as pre-sales. The outbreak of the ICO project on the Ethereum has spawned illegal activities such as the use of the ICO flag to fund funds, fraud and money, and poses a security risk to social and financial stability. (OK Intelligence Bureau)

We will continue to update Blocking; if you have any questions or suggestions, please contact us!