"Okay, ethereum's done, let's go back to ethereum classic."The jokes were frequent during ethereum creator Vitalik Buterin's keynote at the project's Shanghai developer conference, Devcon2, on Monday.There, despite the complexity of the technical changes the project will face in the years ahead (and the controversies in recent past), Buterin conveyed a confidence and personality onstage that was unique among the day's presenters, even as he outlined some of the more nuanced proposals.That scaling was the subject of his talk, entitled "The Mauve Revolution", is not a surprise given the increased relevancy of the issue across all blockchain networks.As more banks and enterprise firms seek to use blockchain systems, the scaling question calls to light the inefficiency of the nascent technology.But the idea that ethereum may be performing below the expectations of this new audience was the frequent butt of Buterin's barbs, with slides featuring titles like "What sucks about ethereum?"and an analogy comparing the network to a "smartphone from 1999".

To begin, Buterin rifled through a number of issues he sees with the blockchain-based decentralized application platform today, including how few transactions it can process.Still, he told the audience: "We have solutions for most of these problems."In the remainder of his presentation, Buterin discussed ways ethereum will be seeking to solve for scalability in the coming months and years.While he did not discuss any specification timeline or plan of execution, the talk felt charged with an overall sense of direction that seemed to resonate."[Buterin] has a very special ability in that he's able to come up with the theoretical solution to a situation that is very much pressing today.He can play devil's advocate to himself," Kesem Frank, COO of Toronto-based enterprise blockchain firm Nuco, told CoinDesk.Lower on the agenda for the talk was discussion of ethereum's proposed effort to implement sharding, a concept that would find it splitting in such a way where multiple blockchains would, almost like miners, form their own consensus on a larger state.

Here, Buterin deferred attendees to the latest version of his "mauve paper" outlining his current thesis on the state of the network, the third edition of which was announced prior to the conference.bitcoin reuters codeKey to ethereum’s vision for expanding its network of users is transitioning from the transaction validation algorithm popularized by bitcoin (proof-of-work) to an alternative (proof-of-stake) that does not require the purchasing of hardware.yellen on bitcoinButerin explained the transition as one that will seek to replicate bitcoin's mining process virtually without "wasting electricity".ethereum advantagesEssentially, Buterin sees his fix as one that will find consumers purchasing ethers (the unit of account on the protocol) in exchange for virtual miners, which would then be governed in such a way as to replicate a competitive verification process.ethereum atm card

"Virtual miners are kept track of in the state of the protocol itself," Buterin explained.20000 bitcoin pizzaHowever, Buterin's version of the idea offers a number of fixes to what he called the “supposed fundamental flaws” of this long-attempted validation mechanism.ethereum fountainFirst, he outlined that it is possible to make such a system more difficult to game if those who buy virtual miners have to wait to join the validation pool, thus gaining eligibility to the rewards produced by the protocol.litecoin macButerin also envisions restrictions on both withdrawals and the transactions that these addresses can as execute as other ways to ensure that those who are validating are doing so in ways that will not be harmful to the computing network.ethereum futures trading

"If you're done mining, you can call this function called start withdrawal.bitcoin spicerThen after another, something like a few months, you can withdraw and take your ether out," he said.Perhaps Buterin's most powerful critique, however, was to the "nothing at stake" problem whereby proof-of-stake algorithms have historically struggled to align virtual miners.Key to solving this, he predicts, will be constructing proof-of-stake in a way that incentivizes participants to continue backing the “winning” version of the transaction history.A feature he proposed as a solution is the inclusion of so-called "dark uncles" or "dunkles" in the protocol."The fact that you made a block on another chain means you get penalized and it hurts you," he explained A tongue-in-cheek play on the term "uncles" (which refers to blocks that are mined but not added to a winning blockchain), he foresees dunkles incurring steep penalties, to the point where losses would even be 1,000% larger than rewards.

Buterin sees the proof-of-stake protocol aiming to encourage the production of a network where the winning blockchain would be the one with the most "value at stake".In this way, he said, validators could bet on the blockchain they think will be the winner by continuing to back it with value."Bets start off being conservative, but then over time expand.As validators see that everyone is betting 10-1 on a particular block, 20-1, 40-1, the value lost on a particular block will expand exponentially," he said.Despite the heavy emphasis on theory, however, Buterin was keen to state the goals of the effort in simplistic terms."The dream is to achieve onchain scaling [while] running on nothing other than consumer laptops."Image via Pete Rizzo for CoinDesk The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.The Ethereum network is a distributed economy like Bitcoin, except it is much, much more powerful.

The essential difference is that Ethereum is programmable.In fact, it only takes a few minutes to program a whole new currency like Bitcoin.There’s been a lot of attention on Ethereum recently as its market capitalization has risen 500% since the beginning of the year to reach $400m (at the time of this writing).Some of this increase might be attributed to Microsoft’s tacit approval of the technology with their release of the “Ethereum Blockchain as a Service” platform on Azure.There’s a joke in the crypto-currency community where sometimes people compare the Ethereum network to Skynet, the computer that destroyed humanity in “The Terminator” movies.Yes, it’s true, a group of developers have actually built an autonomous decentralized computer that cannot be turned off.But, no, it’s not going to become sentient and spiteful, and no, it’s not going to launch all our nuclear weapons and destroy humanity.But, seriously, you can’t turn it off.The notion of unstoppable computer systems should be familiar already.

BitTorrent, the file sharing protocol invented by Bram Cohen, has been around since 2001, and is still very much alive despite concerted, international, billion dollar efforts to destroy it.The latest Star Wars movie can still, right now, be pulled through BitTorrent in minutes straight to your laptop.Doing that is neither legal nor recommended (seriously, go see it in 3D), but it’s interesting to note that the BitTorrent community remains impossible to stop because it is both globally decentralized and continues to deliver value.Ethereum’s inventor, Vitalik Buterin, says that BitTorrent was the very first Decentralized Application (DAP), or a community of actors generating value for each other across the internet.To truly stop BitTorrent, you’d have to shut down every single computer in every home in every country across the planet.A single laptop is sufficient for sharing files to the internet (albeit inefficiently).And, as soon as someone starts downloading a file, they begin sharing it too.

Bitcoin was born from that same concept of resilient file sharing and from the same type of distributed, enthusiastic community.Except, the file being shared is a ledger of transactions, and the value it provides is very fast worldwide money transfer.It’s not surprising that its market capitalization is now around $5 billion.The value that the distributed Ethereum network provides is computation.Bitcoin, despite its massive market capitalization and inherent utility, cannot do general computation.A Bitcoin transaction contains instructions on how it is to be added to the ledger.The number of different instructions you can include is very limited and usually just involve verifying digital signatures.Importantly, there are no instructions for looping, like WHILE and FOR.Looping is not allowed because there is no way to guarantee whether a transaction would loop forever or not.If it did, the Bitcoin network would grind to a halt, permanently.I encourage anyone who is now skeptical about this claim to check out “The Halting Problem,” a deep and fascinating concept in Mathematical Logic that is extremely relevant here.

TL;DR: Someone proved that it’s impossible to always know whether some random piece of software will run forever or not.If you are willing to accommodate software loops and therefore the possibility of your software running forever, then congratulations, you are Turing Complete!This means you can compute anything that is computable, and Ethereum is the only blockchain that can do that.Ethereum achieves Turing Completeness by enabling an economy that charges per software instruction executed instead of per financial transaction executed like Bitcoin does.Instead of a transaction fee, you have a kind of fee for running programs.So, yes, you can deploy programs on Ethereum that loop forever, adding no value.However, the nodes maintaining the network will still get paid, and your program will end up unfunded, broke and forgotten in some dark alley in the blockchain etherspace.On the other hand, it’s theoretically possible to write an autonomous self-funded application on Ethereum that earns money to pay for its own execution, or rather its own existence.

It might create value by enabling new kinds of markets, for example.Artificial intelligence might help optimize the value it delivers to ensure its own survival.In this case, it’s not just the network that’s unstoppable, but an autonomous agent operating within the network.Developers at Augur have created a prediction market platform on Ethereum.These markets are extremely useful and more accurate than polls for predicting future events like political outcomes, sports events, and even terrorist attacks.The only first world country to ban prediction markets, oddly, is the United States, because they are considered a form of online gambling.But, as long as Auger is running, the United States is faced with an efficient, fair, trustless prediction market that is unstoppable and beyond its control.Being Turing complete means that Ethereum is basically a peer-to-peer general purpose worldwide computer, and could subsume the functions of the internet as we know it.You can create file-sharing economies, peer-to-peer crowdfunding events, smart contracts, markets for renting out the unused hard-drive space on your laptop, a disintermediated Uber (imagine the app without the company), a disintermediated Facebook (the social network and ad exchange without the company), etc. It’s basically like the internet in 1994: no-one has any idea what’s next.