Ethereum for Dummies

274 Pages·2019·12.19 MB·English

by  Michael G. Solomon

Ethereum
™
by Michael G. Solomon
Ethereum™ For Dummies®
Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com
Copyright © 2019 by John Wiley & Sons, Inc., Hoboken, New Jersey
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Library of Congress Control Number: 2019936125
ISBN 978-1-119-47412-8 (pbk); ISBN 978-1-119-47411-1 (ebk); ISBN 978-1-119-47406-7 (ebk)
Manufactured in the United States of America
10 9 8 7 6 5 4 3 2 1
Contents at a Glance
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Part 1: Getting to Know Blockchain and Ethereum . . . . . . . . . . 5
CHAPTER 1: Introducing Ethereum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
CHAPTER 2: Learning about Blockchain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
CHAPTER 3: Exploring Use Cases for Ethereum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Part 2: Setting Up Your Ethereum Development
Ethereum™
Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
CHAPTER 4: Examining the Ethereum Ecosystem and Development Lifecycle . . . . . 59
CHAPTER 5: Getting and Configuring Ethereum Development Tools . . . . . . . . . . . . . 77
CHAPTER 6: Establishing an Ethereum Wallet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Part 3: Building Ethereum Distributed
Blockchain Apps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
CHAPTER 7: Building Your First Ethereum Apps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
CHAPTER 8: Learning about Smart Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
CHAPTER 9: Writing Your Own Smart Contracts with Solidity . . . . . . . . . . . . . . . . . . . 147
Part 4: Testing and Deploying Ethereum Apps . . . . . . . . . . . . . 173
CHAPTER 10: Testing Ethereum Apps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
CHAPTER 11: Deploying and Maintaining Ethereum Apps . . . . . . . . . . . . . . . . . . . . . . 191
CHAPTER 12: Integrating Non-Blockchain Apps with Ethereum . . . . . . . . . . . . . . . . . . 205
Part 5: The Part of Tens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
CHAPTER 13: Ten Free Ethereum Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
CHAPTER 14: Ten Design Principles for Distributed Blockchain Apps . . . . . . . . . . . . . 229
CHAPTER 15: Top Ten Ethereum Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

Table of Contents
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
About This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Foolish Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Icons Used in This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Beyond the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Where to Go from Here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PART 1: GETTING TO KNOW BLOCKCHAIN AND
ETHEREUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
CHAPTER 1: Introducing Ethereum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Describing Blockchain Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Introducing Ethereum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exploring Ethereum’s Consensus, Mining, and Smart Contracts . . . . . 11
Buying, Spending, and Trading Ether . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Getting Started with DAO and ICO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Exploring the Ethereum Ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Delving into Development Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Building Blockchain Apps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
CHAPTER 2: Learning about Blockchain . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Exploring Distributed Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Digging into distributed processing . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Exploring problems with distributed processing . . . . . . . . . . . . . . . 24
Presenting some solutions to distributed processing problems . . . 27
Examining the Bitcoin Solution to the Distributed Dilemma . . . . . . . . 28
Describing Blockchains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Examining blockchain details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Protecting blockchain visibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Building Blockchains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Agreeing to add blocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Making blocks immutable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Reviewing the building process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Keeping all blockchains consistent . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Understanding How Blockchains and Databases
Store Data Differently . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Storing data in a traditional database . . . . . . . . . . . . . . . . . . . . . . . . 36
Storing data in a blockchain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Effectively Using Blockchains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Transferring value without trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Reducing transaction costs by eliminating middlemen . . . . . . . . . . 39
Table of Contents v
Increasing efficiency through direct interaction . . . . . . . . . . . . . . . . 40
Maintaining complete transaction history . . . . . . . . . . . . . . . . . . . . . 40
Increasing resilience through replication . . . . . . . . . . . . . . . . . . . . . . 41
Providing transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
CHAPTER 3: Exploring Use Cases for Ethereum . . . . . . . . . . . . . . . . . . . . 43
Diving Into Ethereum Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Exploring Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Creating Ethereum escrow applications . . . . . . . . . . . . . . . . . . . . . . 48
Examining ICOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Establishing Digital Identity Management . . . . . . . . . . . . . . . . . . . . . . . . 49
Managing individual and device identities . . . . . . . . . . . . . . . . . . . . . 50
Reducing fraud and identity theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Examining the ERC-725 standard and beyond . . . . . . . . . . . . . . . . . 51
Examining Industry Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Supply chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Enabling Effective Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Tax payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Government spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Policy development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Notary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
PART 2: SETTING UP YOUR ETHEREUM
DEVELOPMENT ENVIRONMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Examining the Ethereum Ecosystem and
CHAPTER 4:
Development Lifecycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Exploring the Ethereum Blockchain Block Structure . . . . . . . . . . . . . . . 60
Describing Smart Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Introducing Solidity, the Language of Smart Contracts . . . . . . . . . . . . . 66
Working with the Ethereum Virtual Machine . . . . . . . . . . . . . . . . . . . . . 67
Fueling Your Code with Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Surveying Tools for Developing, Testing, and
Deploying Ethereum Apps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Ethereum blockchain client . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Development and testing blockchain . . . . . . . . . . . . . . . . . . . . . . . . . 71
Compiler and testing framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Source code editor/IDE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Describing the Ethereum Development Lifecycle . . . . . . . . . . . . . . . . . . 73
Introducing Smart Contract Development Tools . . . . . . . . . . . . . . . . . . 74
vi Ethereum For Dummies
Getting and Configuring Ethereum
CHAPTER 5:
Development Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Examining Why Multiple Ethereum Development
Tools Are Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Downloading, Installing, and Configuring All the Pieces . . . . . . . . . . . . 79
Installing the blockchain client . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Installing the test blockchain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Installing the testing environment . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Installing the IDE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
CHAPTER 6: Establishing an Ethereum Wallet . . . . . . . . . . . . . . . . . . . . . 95
Unlocking the Secrets of an Ethereum Wallet . . . . . . . . . . . . . . . . . . . . . 96
Examining the Types of Ethereum Wallets . . . . . . . . . . . . . . . . . . . . . . . 96
Sorting out software wallets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Handling hardware wallets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Perusing paper wallets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Choosing an Ethereum Wallet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100
Software wallets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Hardware wallets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
Paper wallets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Installing MetaMask, an Ethereum Wallet . . . . . . . . . . . . . . . . . . . . . . .104
PART 3: BUILDING ETHEREUM DISTRIBUTED
BLOCKCHAIN APPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
CHAPTER 7: Building Your First Ethereum Apps . . . . . . . . . . . . . . . . . . 109
Validating Your Ethereum Development Environment . . . . . . . . . . . . 110
Creating a Truffle project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Editing the Truffle config file . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Exploring the Ganache Test Environment . . . . . . . . . . . . . . . . . . . . . . . 113
Designing Simple Smart Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Coding Your First Smart Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116
Running Your First Smart Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118
Writing your code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Compiling your code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
Deploying your code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
Invoking your code’s functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Paying as You Go . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124
CHAPTER 8: Learning about Smart Contracts . . . . . . . . . . . . . . . . . . . . 125
Introducing Supply Chain and Common Challenges . . . . . . . . . . . . . . 126
Describing supply chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Explaining difficulties when implementing a supply chain . . . . . . 127
Table of Contents vii
Examining How Blockchain Can Help Resolve
Supply Chain Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128
Describing a Blockchain Supply Chain Solution . . . . . . . . . . . . . . . . . . 129
Paying for supply chain services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Managing assets on the supply chain . . . . . . . . . . . . . . . . . . . . . . . 130
Digging into Solidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Describing Basic Smart Contract Syntax . . . . . . . . . . . . . . . . . . . . . . . . 133
Declaring valid compiler version . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Commenting your code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Importing external code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Defining your smart contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Handling Data in Solidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Learning about Computation and Gas . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Exploring Access Modes and Visibility of Smart
Contract Functions and Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Controlling Execution Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .144
Handling Errors and Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Writing Your Own Smart Contracts
CHAPTER 9:
with Solidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Reviewing Supply Chain Design Specification . . . . . . . . . . . . . . . . . . . .148
Payment token smart contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Supply chain smart contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Creating New Smart Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
ERC-20 token interface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
ERC-20 token smart contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Supply chain smart contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Coding Primary Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
ERC-20 token functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Supply chain functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Using Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163
Defining events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
Triggering events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
Introducing Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Designing for Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Implementing Minimal Functionality . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
PART 4: TESTING AND DEPLOYING ETHEREUM APPS . . . . 173
CHAPTER 10: Testing Ethereum Apps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Understanding Ethereum dApp Testing . . . . . . . . . . . . . . . . . . . . . . . . 176
Writing tests from the beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
Choosing the right test blockchain . . . . . . . . . . . . . . . . . . . . . . . . . . 176
Learning the steps in the testing lifecycle . . . . . . . . . . . . . . . . . . . . 177
Testing for software quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .177
viii Ethereum For Dummies