Writing Smart Contracts Dionysis Zindros Smart Contracts Day - - PowerPoint PPT Presentation

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Writing Smart Contracts Dionysis Zindros Smart Contracts Day - - PowerPoint PPT Presentation

Jan 16, 2024 297 likes •812 views

Writing Smart Contracts Dionysis Zindros Smart Contracts Day Athens, March 2017 We talked all about what smart contracts are... ...but what does a real smart contract look like? Lets talk about writing actual Smart Contracts with code

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Writing Smart Contracts

Dionysis Zindros

Smart Contracts Day Athens, March 2017

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We talked all about what smart contracts are...

...but what does a real smart contract look like?

  • Let’s talk about writing actual Smart Contracts with code
  • Using the first ever blockchain: Bitcoin

In this talk, we’ll get slightly more technical :)

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Outline

  • The bitcoin blockchain
  • The transaction graph
  • Inputs and outputs
  • Unspent transaction outputs
  • Digital signatures
  • Creating and resolving encumbrances
  • The stack-based bitcoin computer
  • A first contract: Paying someone some money
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Enter bitcoin

  • Very simple “smart contract” capabilities
  • Expressibility very limited

○ Can express ideas such as a “payment contract” ○ We’ll go through that in this talk

  • Good introductory example to practical smart contracts
  • Significantly extended by blockchains created after Bitcoin

○ e.g. Ethereum, Cardano ○ Darryl will talk more about this in a bit

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Transactions

  • Bitcoin’s basic structure: A transaction (tx)
  • A transaction transfers money from an old owner to a new
  • ne

tx from to

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tx Alice Bob

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Transaction edges

  • I’ll illustrate a transaction as a node (circle)
  • It has incoming and outgoing edges (lines)
  • The incoming edge shows who pays
  • The outgoing edge shows who is paid
  • The nodes do not illustrate owners, but transactions
  • The edges have owners
  • Each edge has a weight (number associated with it)

which is its nominal monetary value

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tx Alice Bob 15€ 15€

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tx Alice Bob 15mBTC 15mBTC

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tx input

  • utput
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The transaction graph

tx

  • A graph is a group of edges connecting various nodes

together

  • Payments are made by connecting transaction nodes
  • Money is a chain of transactions

Alice Bob 1 BTC 1 BTC

tx

Charlie 1 BTC

tx tx

Dionysis 1 BTC

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1 BTC

Unspent money

  • Money that can be spent is unspent money
  • It is the dangling outgoing edges of transactions (utxo)

tx Alice Bob 1 BTC tx Charlie 1 BTC tx Unspent transaction output

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1 BTC Alice tx

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1 BTC Alice tx utxo

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1 BTC Alice tx tx

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1 BTC Alice 1 BTC Bob tx tx

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1 BTC Alice 1 BTC Bob not utxo any more new utxo tx tx

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Proof of ownership

  • Digitally sign the UTXO that I want to spend with the new tx details
  • This ensures I’m the true owner of the UTXO
  • The new transaction must include the tx
  • This way I ensure I give permission to the new owner and my signature

cannot be forged towards a wrong owner with just copying it

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1 BTC Alice tx 1 BTC Bob Alice signs tx

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Bitcoin script: The original smart contracts

  • People talk about Smart Contracts in Ethereum
  • The original Smart Contract language is bitcoin!
  • Bitcoin provides a language for expressing simple smart

contracts

  • What can it express?

○ Alice owns some money ○ Alice and Bob own money together ○ Micropayments - continuous transfer of value

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Bitcoin script: Encumbrances

  • The owner of an edge on the bitcoin tx graph is not just

bitcoin address!

  • It is a computer program which decides whether the

edge can be spent

  • It is written bitcoin script
  • A dangling edge is an encumbrence
  • This program is called a scriptPubKey
  • This is the program the verifier runs
  • This allows us to express more complicated ownerships
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tx Alice Bob 36 mBTC 36 mBTC

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1FdtUtvK5vZxwo8jzjzid5EwGAB7paqX4n 128MZKqUsvg2kYJQ5LCVDx8Mdn8xrijzQY

tx 36 mBTC 36 mBTC

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tx

OP_DUP OP_HASH160 128MZKqUsvg2kYJQ5LCVDx8Mdn8xrijzQY OP_EQUALVERIFY OP_CHECKSIG

36 mBTC

OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5EwGAB7paqX4n OP_EQUALVERIFY OP_CHECKSIG

36 mBTC

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Bitcoin script

  • The script runs on a stack machine
  • It contains simple serial commands without loops
  • It runs on every network computer when a utxo is spent
  • The output of the execution is 0 or 1
  • This is part of transaction validation
  • If the output is 1, the input is valid and can be spent
  • Otherwise the input is not valid
  • And the tx is not valid
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Bitcoin script

  • When a tx spends a UTXO, the creator of the tx has to prove that the script
  • utputs 1 successfully

○ i.e. that the output edge is spent fairly

  • For this purpose, it supplies some parameters for the scriptPubKey program

(the program = the encumbrance) so that when the scriptPubKey program runs with these parameters, it outputs 1

  • The execution parameters of scriptPubKey are called scriptSig
  • These parameters are given as part of the new tx which the old UTXO is

connected to

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Bitcoin script execution

  • 1. We put the scriptSig parameters on the stack
  • 2. We run the commands of scriptPubKey one by one
  • 3. Each of these commands can change the stack
  • 4. We check if the stack ends up with just a 0 or 1 in the end

for failure or success

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Pay-to-pubkey (p2pk)

  • The simplest smart contract
  • And the first ever written
  • Expresses the notion that some money rightfully belongs

to an owner

  • Similar to a physical bank check
  • Except it doesn’t need a central trusted third party like

bank or government

  • Security is provable
  • Unlike “security by call-the-cops” of traditional checks
  • So it can work pseudonymously
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Pay-to-pubkey

scriptPubKey: 045a5f526dfe5d5995bf95f12 OP_CHECKSIG scriptSig: signature σ

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Pay-to-pubkey

scriptPubKey: 045a5f526dfe5d5995bf95f12 OP_CHECKSIG scriptSig: signature σ σ

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Pay-to-pubkey

scriptPubKey: 045a5f526dfe5d5995bf95f12 OP_CHECKSIG scriptSig: signature σ σ

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Pay-to-pubkey

scriptPubKey: 045a5f526dfe5d5995bf95f12 OP_CHECKSIG scriptSig: signature σ 045a5f526dfe5d5995bf95f12 σ

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Pay-to-pubkey

scriptPubKey: 045a5f526dfe5d5995bf95f12 OP_CHECKSIG scriptSig: signature σ 045a5f526dfe5d5995bf95f12 σ

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Pay-to-pubkey

scriptPubKey: 045a5f526dfe5d5995bf95f12 OP_CHECKSIG scriptSig: signature σ 1

transaction completed successfully

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Pay-to-pubkey-hash (p2pkh)

  • The way payments are done in bitcoin today
  • Again a contract that ensures someone owns money
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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ pubKey pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ pubKey pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ H(pubKey) pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ H(pubKey) pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ 1FdtUtvK5vZxwo8jzjzid5Ew H(pubKey) pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ 1FdtUtvK5vZxwo8jzjzid5Ew H(pubKey) pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ pubKey signature σ

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Pay-to-pubkey-hash

scriptPubKey: OP_DUP OP_HASH160 1FdtUtvK5vZxwo8jzjzid5Ew OP_EQUALVERIFY OP_CHECKSIG scriptSig: pubKey signature σ 1

transaction completed successfully

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Pay-to-pubkey-hash

  • Most payments in bitcoin today are Pay-to-pubkey-hash
  • Pay-to-pubkey was used at the beginning of bitcoin
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A more complicated contract

OP_SIZE OP_NIP 16 OP_NUMEQUAL OP_NUMEQUAL OP_IF ALICE_PUB_KEY OP_ELSE BOB_PUB_KEY OP_END_IF OP_CHECKSIG OP_2DUP OP_HASH160 BOB_HASH_CONST OP_EQUALVERIFY OP_HASH160 ALICE_HASH_CONST OP_EQUALVERIFY OP_SIZE OP_NIP 16 OP_NUMEQUAL OP_SWAP

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How can one argue about the security of these?

  • These scripts are complicated and unreadable
  • How can we know they do what we want?