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Web3 Industry Report

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Ethereum Whitepaper

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Tools for creating dapps⁠

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Web3 has some limitations right now:

Scalability – transactions are slower on web3 because they're decentralized. Changes to state, like a payment, need to be processed by a node and propagated throughout the network.

UX – interacting with web3 applications can require extra steps, software, and education. This can be a hurdle to adoption.

Accessibility – the lack of integration in modern web browsers makes web3 less accessible to most users.

Cost – most successful dapps put very small portions of their code on the blockchain as it's expensive

Ethereum Account type:

Externally Owned Account

Creating an account costs nothing

Can initiate transactions

Transactions between externally-owned accounts can only be ETH/token transfers

Made up of a cryptographic pair of keys: public and private keys that control account activities

Contract Owned Account

Creating a contract has a cost because you're using network storage

Can only send transactions in response to receiving a transaction

Transactions from an external account to a contract account can trigger code which can execute many different actions, such as transferring tokens or even creating a new contract

Contract accounts don't have private keys. Instead, they are controlled by the logic of the smart contract code

Mastering Ethereum

Ethereum Spec, Client, node

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Trapdoor function:

RSA - Prime Number Factorization

amount of bits required by ECC vs RSA to achieve same security level

256 bits vs 3072 bits

(Top Secret) 384 bits vs 7680 bits

Keccak256("") =

c5d2460186f7233c927e7db2dcc703c0e500b653ca82273b7bfad8045d85a470

SHA3("") =

a7ffc6f8bf1ed76651c14756a061d662f580ff4de43b49fa82d80a4b80f8434a

Ethereum uses Keccak-256, even though it is often called SHA-3 in the code

Wallets

wallet refers to the system used to store and manage a user’s key [programmer’s perspective]

common misconception: wallet does not hold ether or tokens; wallet is simply a keychain

Wallet Technology Overview

nondeterministic wallet aka. Just a Bunch of Keys wallet - each key is independently generated from a different random number.

deterministic wallet - all the keys are derived from a single master key

mnemonic seed - the seeds are often encoded as a list of words

Hierarchical Deterministic Wallets (BIP-32/BIP-44)

Wallet Best Practices

Mnemonic code words, based on BIP-39

HD wallets, based on BIP-32

Multipurpose HD wallet structure, based on BIP-43

Multicurrency and multiaccount wallets, based on BIP-44

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The Ethereum Contract ABI

in ethereum, the ABI is used to encode contract calls for the EVM and to read data out of transactions

the purpose of an ABI is to define the functions in the contract that can be invoked and describe how each function will accept arguments and returns its results

an contract’s ABI is specified as a JSON array of function descriptions & events

function description JSON Object

type, name, inputs, outputs, constant, payable

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event description JSON Object

type, name, inputs, anonymous

All that is needed for an application to interact with a contract is an ABI and the address where the contract has been deployed.

Ether.js Modules

Ethers.Provider: This module enables you to establish a connection with the Ethereum blockchain. You use it to issue queries and send signed transactions. Through this module, Ethers.js users get to change the state of the blockchain.

Ethers.Contract: You use this module to deploy and interact with smart contracts. While deploying smart contracts is one of the main purposes of Ethers.Contract, it has more to offer. As such, it also packs functions that enable developers to ‘listen’ to smart contract events (

sync and index smart contract events⁠

). Furthermore, you also use this module to get information about smart contracts and call particular functions provided by smart contracts.

Ethers.Utils: You will use this module when you want to format data and process user inputs. As such, Ethers.utils makes building dApps a whole lot easier.

Ethers.Wallet: As you can assume based on the ‘.wallet’, Ethers.Wallet provides a way to connect to any existing Ethereum address (an Ethereum wallet). On top of that important feature, this module also enables you to create new wallets and sign transactions

Web3.js Modules

Web3.eth: The Eth module is there for interacting with the Ethereum network. It offers several sub-modules, including Web3.eth.subscribe, Web3.eth.contract, Web3.eth.accounts, Web3.eth.personal, and more.

Web3.*.net: The Net module is there for interacting with network properties. Of course, it may be used as a sub-module to interact with Ethereum (Web3.eth.net).

Web3.bzz: The Bzz module is there for interacting with the swarm network.

Web3.shh: The Shh module is there for interacting with the whisper protocol.

Web3.utils: This module provides utility functions for Ethereum dApps and other web3.js packages.

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Mastering Ethereum

Wallets

Wallet Technology Overview

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