In this article, we briefly review some advance topics in  Ethereum blockchain development. To follow and understand this article, basic  knowledge of blockchain technology and Ethereum development is required. is an  excellent article for learning about blockchain history and evolution and how  blockchain technology works. Here In this article, we cover advance Ethereum concepts such as  Oracle, Off-the-chain Data and PoS and TPS. Ethereum Oracle Ethereum smart contracts are executed on nodes worldwide. To  obtain the same outcomes, nodes have to take the same set of inputs. This is  called determinism. Ethereum relies on the determinism property validating  smart contract outputs. That is, validating nodes have to yield the same  results while running the same code. In this sense, the determinism property  plays a key role in enabling nodes reaching a consensus. Maintaining determinism can be a challenging task. On the  one side, Ethereum is a general- purpose platform. Its smart contracts require  data or inputs from external sources such as the internet. Without access to  these sources of information, use cases for smart contracts will be  restrictive. On the other side, even with a tiny time difference, validating  nodes may retrieve different information from an external source. With  different inputs, nodes will end up with different outputs. Consequently, the determinism property does not hold. For  avoiding the issue, smart contracts are not permitted to call an internet URL  or pull data from an external source directly. To resolve the paradox, Ethereum  relies on . Oracle A definition of Oracle is as follows: "A  shrine in which a deity reveals hidden knowledge or the divine purpose through  such a person." – Merriam-Webster In blockchain, refers to the third-party or decentralized data feed services that provide  external data. Oracle provides interfaces from the real world to the digital  world. Oracle data is not part of blockchain and is available off-chain. oracle There are different  types of oracles. Two of them are software oracles and hardware oracles: : This normally refers to easily accessible online information such as stock index prices, FX rates, economic  news, weather forecasts, and so on. Software oracles are useful since they  provide smart contracts with a wide range of information and up-to-date data. : This normally refers to scanned information such as UPS delivery  scanning, registered mail scanning, supplier goods delivery scanning, and so  on. This feed can be useful to activate a smart contract acting on an event's occurrence.Ethereum Off-the-chain Data Software oracles Hardware oracles There  are multiple scenarios where data cannot be stored on a chain: : Data stored  on an Ethereum blockchain is immutable. However, contents of state variables vary  as account balances change. A solution is to save them off-the-chain. : We have just talked about that. : Commonly digitized assets require a large dataset to describe/define them. Given a limited size of blocks,  it is not feasible for hosting  complete asset information on a chain. : For optimization, Ethereum full nodes need to keep a portion of the distributed ledger, that  is, to trim a ledger. The trimmed blocks are saved off-the-chain at a  centralized location for supporting future inquiries. State variables Oracle Digitized assets Trimmed blocks Ethereum PoS is an algorithm for choosing a validator to build the next block. Per the PoS  algorithm, when a validator owns more coins, the validator has a higher chance  to be chosen. Compared to PoW, PoS is much more energy efficient and quicker. A pure PoS  will lead to the richest  validator being selected frequently, causing a problem, referring to a node  validating the majority of the blocks  being added to the chain. This obviously will not work. Additional randomness is required to give other  validators better chances. Several  randomization methods are available: Proof of Stake (PoS) supernode Uses a formula to look for the lowest hash value in  combination with the size of the stake for selecting a validator. : Coins owned long enough,  say 30 days, are eligible  to compete for the next block. A validator with older and larger sets of  coins have a better chance of being granted the role. This implementation chooses a limited number of nodes to propose and  validate blocks being added to the blockchain. : Each node is selected randomly using a verifiable random beacon for  building the new block. Randomized block selection : Coin age-based selection Delegated PoS : Randomized PoS Ethereum is working on replacing PoW with PoS in  future releases. TPS and Ethereum Performance Ethereum is inherently slow. The average waiting  time for a validator building a block is 17  seconds. It usually requires 12 blocks in depth before a transaction  (containing the first block) is confirmed. This is 12 × 17 = 204  seconds or 3.4 minutes of waiting time for a transaction to be confirmed. The is necessary. 12-blocks-in-depth rule When a block is newly added to the blockchain by a validator to its ledger  copy, there could be a competing path worked on by other validators. The  validator may lose the competition for building the longest blockchain. Per  blockchain protocol, the validator has to drop its own block being worked on  and add the winning block to its ledger copy. The 12-blocks-in-depth rule  assures that a transaction does not end up in a block to be dropped later. Throughput is a  measure of how many units of information a system can process in a given time  window. For measuring the performance of a transaction platform, the throughput  is expressed in terms of ( ). throughput per  second TPS To calculate  Ethereum TPS, we take the approximate number of transactions in a block (using  2,000). Then, we divide it by the waiting time in seconds for a transaction to  be confirmed, 204 seconds. So, Ethereum TPS is approximately 9.8, that is,  almost 10 transactions per second. By applying the same approach, we can  estimate the TPS for bitcoin, which is about 0.5 transaction per second. On the other hand, Visa has a TPS of 2,000 with a peak TPS of 40,000. A high performance database such as VoltDB can  handle over a million insertions a second. A stock exchange can match thousands  of trades a second. It clearly shows a gap that needs to be closed by the  blockchain community. Ethereum is working on multiple solutions to  increase TPS. PoS is worked on as a replacement of the computationally  inefficient PoW algorithm. PoS is not fully implemented and upgraded on mainnet  due to concerns regarding the emergence of a set  of supernodes (which receive an outsized role  in building the new blocks). is  the Ethereum community's attempt to transiting out of PoW and into PoS. Per  Casper protocol, validators set aside a portion of their ether as a stake. When  a validator identifies a candidate block, ether is bet on that block by the  validator. If the block is indeed added to the chain, the validator is rewarded  based on the size of its bet. Validators acting maliciously will be penalized  by having their stakes removed. Casper Led by Vitalik, the Ethereum Foundation is also  working on the approach,  which is aiming at increasing TPS by 80 times. Sharding splits up the state of  the network into multiple shards, where each shard has its transaction history  and portion of the network's state. sharding Another idea to increase TPS is . Plasma is a technique for conducting off-the-chain transactions while relying  on the underlying Ethereum blockchain to provide its security. Therefore,  Plasma belongs to the group of off-chain technologies. is another example of this. Plasma Truebit Summary In this article, we review some advance topics on  Ethereum blockchain development such as Oracle, Off-the-chain data, PoS and TPS.  The next step is to build your first Ethereum application via tutorial. Write  Ethereum Smart Contracts with Solidity in 1 hour This article is written by Matt  Zand (founder of ) in  collaboration with Brian Wu who is a senior Blockchain instructor at . About Authors High  School Technology Services Coding Bootcamps

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Overview of Advance Ethereum concepts of Oracle, off-the-chain data, PoS and TPS

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