Hi everybody, my name is Yosef. Welcome to this session. We're going to do a Q&A with Jeff. Jeff, do you want to share a little bit about yourself?
So my name is Jeff Coleman. If you've seen me on social media, it's probably on Twitter as technocrypto or sometimes jeff.eth. I'm someone who's been in the blockchain space for about 13 years now. First Bitcoin, when this guy came along and said, 'Hey, this Ethereum thing,' I was like, 'Oh, that's interesting.' So that became a pretty full-time interest of mine. I'm a technologist, a researcher, worn many other hats over the years, but I'm also very passionate about connecting the global Ethereum community into the local community in places like Accra and elsewhere. There's been a bit of a gap there, and it's a bridge that we need to make stronger and connect better as a community.
So thanks, Jeff. And our travel blogger, Vitalik, do you want to share something?
I also co-founded Bitcoin Magazine, but yeah, so I do Ethereum things. I think these days I do a combination of some protocol-level research and development work, but also kind of coordinating across different people in the ecosystem and trying to figure out what are all of the different pieces that need to be done to really make Ethereum useful for billions of regular people, and trying to do my part to help make sure that all those different pieces happen.
Thanks, Vitalik. And my name is Yosef. My role, I wear multiple hats, one of which is helping build a bridge between global Ethereum communities and African communities, and also on a mission to have more African builders, African educators, so that we build the solutions that we want with blockchain technologies and achieve the vision of more than a billion users, because we can actually use these trust coordination layers for a lot of our needs. So I think we're going to jump into questions. Who has questions to ask the panel?
Great. While you all get set up, I'm going to ask Vitalik the first question. Tell us, for people who are kind of new to Ethereum, can you give us a little bit about what Ethereum is, how it's set up, and what makes it different from other chains that some of us hear about?
Sure. So I usually describe Ethereum as a general-purpose blockchain. A blockchain, we all know, is this kind of decentralized computer network whose job it is to keep track of and come to agreements on data and events that happened and who did different things at particular times. It's a kind of network that's useful for applications like money, but it's also useful for many other kinds of applications as well. The Ethereum project basically started out of this desire to take what's already been done in the blockchain space with Bitcoin and with a couple of other projects that were focused on one application, and try to build something general-purpose so you could expand that, create a platform that brings the same benefits and lets you create global, open, transparent, permissionless applications for any use case that you can come up with that makes sense to do on a blockchain at all. The project started at the end of 2013. The chain launched in 2015. The chain has been running for over seven and a half years now. For about five months, it's now been running as a proof-of-stake chain, which has been wonderful for the ecosystem. In terms of what makes Ethereum different, I think there's different answers that depend on what you're comparing it to and what aspects of it that you care about. It's possible to compare Ethereum to Bitcoin, to Cardano, to the AI industry, to traditional Silicon Valley tech companies, to parts of governments. Depending on what metaphor you take or what aspect you care about, the answer often ends up being different. But one of the common factors is how we really value decentralization. We really value Ethereum not just as a technology but as a sort of community where we have lots of different people from many different parts of the world with lots of different expertise and experiences coming together in this ecosystem where anyone is free to enter and become part of it, whether that means being part of running the network, building an application, or participating in the ecosystem some other way. We really value doing the best that we can to be this network where really anyone can participate at any part of the stack. It's something that does not depend on this kind of small centralized group of people in order to operate. Even the Ethereum Foundation itself, we kind of really believe in decentralization at an organizational level. For example, the Foundation spends more money on grants than it does on paying its own employees. So we actually try to kind of distribute power and agency to the edges and to independent groups who know what they're doing in many cases better than we do, as much as possible. Ethereum is this very big and international community of people who are building applications, all kinds of things on top of the technology. It includes finance, DeFi, saving money and moving money across borders. It includes things like NFTs, non-financial applications, things like ENS, different kinds of records, identity and reputation-related applications, DAOs, these kind of communities of people that are managing assets by using rules that are encoded on programs on the blockchain. All of these things, and there's a really big community that's building lots of applications in each one of those areas. And I know this is the community that, as a foundation, we try to do the best that we can to support.
Thank you. Quick question to you all: who's building a project on the Ethereum network here? Raise your hand. Maybe could you all just stand up so we see you all. Awesome. How many people here are developers, either at the application or protocol level on Ethereum, including Layer 2s? Raise your hand really high. Okay, cool. So just wanted to open it up to questions that people have here that would like to ask Vitalik or Jeff.
Hi, yes, thank you so much and thanks for your time. My question is straight to you and Vitalik. So if you consider Africa as far as blockchain is concerned, I've always said it's a need in Africa while it's a want in the West. It's easier to send a dollar to somebody in San Francisco from the other side of the world than it is from Ghana to Togo. So if you look at blockchain and its applications, rather than concentrating more in the Asian region and North America, what is the strategy for Ethereum as far as Africa is concerned? Because I know from East Africa, Central Africa, South Africa, West Africa, especially Nigeria, young people are building stuff, but there's no support. There's not a missionary approach. People are building stuff on Ethereum, but if you look at the infrastructure as it is, the support has been in Asia and North America. What's the strategy as far as Africa is concerned? You have a continent of 1 billion people, in the next 6 years, 0 to 30, this is where the use of blockchain is. So what's your strategy for Africa? Thank you.
Jeff, can you... That's a great question. I'll answer in several parts. First of all, I'm going to talk a little about how I got into the community. Before blockchain was ever a thing, I was living in Ethiopia for a while. I lived there for about 10 years. I went to school in Kenya. When I first heard about blockchain, I immediately thought exactly what you said. A lot of these abstract ideas that people have around blockchain, 'Oh, maybe it's useful for this, maybe it's useful for that,' in much of the global South, it's a theory. And part of that theory is a narrative that says, 'Oh, it'll be useful for financial equality, it'll be useful for access,' but it's very theoretical. To get to the second part of your question, I have to add one little explanation, which is one of the differences between the Ethereum community and a lot of the other communities is that the Ethereum community is very spread out and everything that happens in Ethereum is managed primarily by the community. It's not just the Ethereum Foundation that does everything. I'm not a member of the Ethereum Foundation, Yosef is not a member of the Ethereum Foundation. In a lot of these other protocols, the crowd sale goes directly into the foundation, the foundation runs everything. That's not how it is in Ethereum. So when I hear the question, 'What is Ethereum's strategy?' I ask, 'What's the Ethereum community's strategy?' And I think that the simplest answer is it's been lacking. It hasn't been there. I think there's many, many factors in what this has been, but for a long time, this idea of actually using blockchain in places that matters has been lacking. Some of the reasons for that have been about the rapid growth of the protocol raising fees to a level where the protocol is inaccessible. That's been a big priority for people who are working on the core level, trying to make that better, trying to scale Ethereum, trying to get it to the point where we have rollups and things that bring costs down so that people can use it. But I think because of that and because of other systemic issues in the Ethereum community, there's been excuses about why that global community has been mostly concentrated in these other places, and when the communities exist here, they don't get the access and support that they need. The other thing that I'd like to say in response to that is I hope that this is changing. It's coming from behind. I think there's a lot of work to do. I think the global Ethereum community has not shown up on the continent the way that they need to. Part of the purpose of this trip, why we're spending a month here, is to try and start that bridge and to start expanding that, because in Ethereum, you can't just have the foundation decide to fix that. The broader Ethereum community needs to come here, connect here, be plugged in. When people are working on projects here, they need to have that access, they need to have that support. Part of that is about spending time together and just getting to know each other, but part of that is also about the physical times that we connect. The major events for the Ethereum community have been held in places that are often hard to get visas to, they're expensive to travel to, there's all these barriers in place, and I think there needs to be a lot of work to systematically break those barriers down. Across the spectrum, how that needs to play out is one, more interpersonal contact, because it's wonderful that Vitalik's here, but the foundation by itself cannot fix this problem. The community as a whole needs to address this. So we need to get more interpersonal contact, get people plugged into those projects, and then we need to get people thinking the opposite way around. Yosef had a great point that in some ways is kind of like the founding theme for this trip, which is it's not that Africa needs Ethereum, it's that Ethereum needs Africa. This is the place where the young talent is growing up. This is where new people are. This is where there's so many new developers and technologists and innovators. And exactly like you said before, a lot of these ideas of what blockchains are useful to solve are very theoretical in the global North. They're very abstract. They're very nice-to-haves. They're not have-to-haves. And because of that, if you just take those ideas and try to transport them here, they'll fail. Which is great, because there are enough ideas here that need to succeed. And the ideas here are in contact with actual problems, with actual situations that people are facing. They're designed to address actual issues. And in my view, that's what blockchain is really all about. So what I would like to see is a reversal of that scenario. The pipeline of information we need to build is for people around the world who are not plugged into local communities here to become informed, because they're presently ignorant and they have a lot of abstract projects that maybe don't make sense that they need to loosen their grip on and take a look at what people are building here. That's my answer.
One quick thing I'd like to add to what Jeff said. I think also having communities here connect with one another to create enough of a gravitational point. I was quite surprised just how many different sub-communities even exist in Accra that we're kind of getting to meet individually. So I hope you all use this space to do that. I've heard of initiatives such as ETH Accra that want to happen. I think it would be really amazing to make something like that a success and for the local community to rally around. Those of us who are either bridge-building or some of us who are in the global Ethereum community can plug in and support that. So I think the more there's connectivity within the local community, it makes it a lot easier to then communicate to the rest of the world how to approach and think about African ecosystems, because what global builders are optimizing for is very different from what you're optimizing for, because the conditions are very different. And I think that requires a little bit of education and hand-holding, but I'm sure we can get to that point. I think just kind of follow up a bit, a big part of the purpose of this trip for us, I think, is to kind of help us understand and form concretely what the Africa strategy should be in the future. And I think as far as the answers that we have, supporting local groups and identifying which are the local groups that can make the best use of support is a big part of it. We've definitely made some contacts both here and in Kenya and other places. Another really big part of the answer is Layer 2s. I think Layer 2s are part of the answer for two reasons. One part of the reason is that a big part of the reason why Ethereum the blockchain has not been succeeding in pretty much every low-income country and region for the last few years is basically fees. I spent a bunch of time in Argentina and other Latin American countries over the last year and a half, and I've seen some of this personally. I remember visiting some places in Buenos Aires, like there was a coffee shop that accepted Bitcoin, there were some currency exchangers that accepted cryptocurrencies. When I looked and saw the QR code that they showed me, they had a Binance account. I sent them some ETH and the transaction took a couple of minutes to process. By the way, that's actually one piece of UI that has improved over the last year and a half. Over about a year and a half, transactions would often take many minutes to process, but now a lot of the time they just reliably get included in six seconds. EIP-1559 and the merge I think deserve a lot of credit for that. These are actual Ethereum protocol changes that made the user experience of the blockchain better in real ways that people can understand, and that's a kind of victory that I think we want to double down on and have five more victories like that. But the main thing other than that is just fees. Sending that transaction from me to this wallet took, I think, like $150, and the other time I sent it, the transaction fee was something like $330. These are numbers that are totally possible to forget if you are a person in a rich country who has also been part of the crypto space since 2014 and so you already have a pile of Bitcoin and ETH. If you're just someone coming into the ecosystem, even these numbers are the difference between cryptocurrency being viable and cryptocurrency being not viable. And transaction fees being high are a problem that today Binance as a wallet basically fixes for a lot of people. In Argentina, most people just use Binance wallets and people are used to Binance-to-Binance transactions, zero transaction fees, and they're instant. I think we've seen the perils of using a totally centralized service and thinking that you can trust it just because it's run by a very charismatic person who wears a suit and goes on panels with Bill Clinton and has his face up everywhere in San Francisco. But so we want the decentralized approaches to win. But the reality is that centralized approaches have this good UX, and as a decentralized ecosystem, we have to match that UX. Speed of transaction inclusion and fees, and Layer 2s solve fees. Layer 2s are the way that Ethereum is scaling, and on Layer 2s already, transaction fees are somewhere between five and 10 times lower than they are on Layer 1. And with EIP-4844 and with future changes, the plan is for fees on Layer 2s to go even lower. On inclusion speed, Layer 2s have this concept of pre-confirmations, where you can get a kind of confirmation that your transaction got accepted often much faster than Layer 1s can, and this is also a very big and powerful benefit to users. So as a technology, Layer 2s are the only thing that can make using Ethereum convenient and affordable. But also Layer 2s are important because of the community and talent that they bring. Optimism, Arbitrum, Polygon, StarkNet, zkSync, Taiko, all of these systems that are the technology that can make Ethereum affordable to regular users around the world and actually convenient, and they are the groups that are often doing a lot of this very direct user and developer outreach. And I think they are the group that ultimately also needs to have stronger links between Africa and the Layer 2 teams and between other parts of the world and the Layer 2 teams as well.
Thank you. I think there's a question here.
One of the things that spurred a lot of building in the crypto space is public goods funding, and Gitcoin has been a very key player in that field, to the extent where even innovations like Uniswap have their roots tied to Gitcoin one way or the other. Now personally, I've had this experience where I've tried a couple of times to list a project on Gitcoin and the process has been hectic and it hasn't been successful. I know a couple of developers that have presented their project also and it hasn't been successful. So I'm happy that you are on the ground in Africa and you've seen a lot of things, you've learned a lot of things. I am keen to pick your brain on a possible public goods funding mechanism that can be implemented in Africa. So that is the first question. The second question is that most of these protocols or projects or ecosystems have sub-communities in Africa, right? And you spoke about decentralized grants in the sense that you don't actually have connection to the Ethereum Foundation, but they give out grants, etc. It's always difficult for Africans or African projects or communities to get access to this grant stuff. So I guess, how do we bridge that gap? Does the sub-DAO concept help with that? That is the question where we can have sub-DAOs connected to major DAOs that can help facilitate coordination in that aspect. The third question is actually contract-secured revenue. Can we implement, is there a possibility that we can implement this in major protocols where these revenues generated can be felt to some places in Africa to help developers here? So that is my questions.
Yeah, I think with public goods funding mechanisms, I personally don't yet understand well what the particular errors that people have been seeing here trying to get into the Gitcoin ecosystem. But I think a big part of that solution just has to involve better links between the Gitcoin community and local people here that are trying to get on that. So that's also something that I hope is going to start happening soon. Aside from that, my opinion is that public goods, it's generally better for public goods spending mechanisms to be diverse. Gitcoin is one thing, and I think improving Gitcoin and making Gitcoin really live up to its promise is really important, but it's also not the only thing. There's often a lot of kind of local community organizations and local DAOs that do public goods funding, and that's also something that I think needs to be supported much more. In Optimism, retroactive public goods funding is another good example. They're in the process of doing round two, but they're only getting a very particular sample of projects that are being rewarded by round two. That's something where I think just stronger connections between the communities need to be made. In a lot of these cases, ultimately, I think it makes sense to make these public goods funding mechanisms more kind of localized and multi-level. One thing in the middle is never going to be able to properly fund all of the public goods everywhere. But if you have a larger set of local things that are run by different groups of people, then that creates a larger chance that everything that needs to be funded actually is going to be covered in some way. So right now, that's what I hope to see more. I hope to just see more variety in public goods funding solutions, and I hope to see both the existing ones and the new ones try to get more support.
I'd like to chime in a bit on Gitcoin because you're absolutely right, and this is a symptom of what we were discussing earlier. Because I've been involved with Gitcoin, not like I don't work for Gitcoin, but I've been involved in that community for a long time. I've contributed to a lot of rounds. I'm really fascinated by that project, but there is an incredible underrepresentation of African projects and some other categories on there. Where does that come from? You correctly identified that the first hurdle is getting listed in the first place. One of the biggest barriers that starts there and continues throughout the process is when people have a lack of personal connection to a community. They recognize that they have an ignorance, they recognize that they don't know the difference between quality projects and poor quality projects and scams, but they stop there if they don't have a point to follow up on. I've seen with so many projects that try to get listed, and what they're trying to do is they're just trying to say, 'No, we're a legitimate project,' and whoever's engaging with them is saying, 'I don't know anything about the space, I don't know who these people are.' They correctly identify that they're ignorant about that, but then they don't have a next step to follow up on. And in my mind, the obvious next step is you should connect with someone in that community to find out if this is a legitimate project. That's what I'm talking about with building these bridges. If you want people to be able to have that access, you have to take them and have them meet people. They can be meeting people online, they can be participating online in those communities to get to know people, they can be coming to events. And again, if the events they're going to are events that people from here can't get visas to attend, of course they're not going to be meeting the members of the local community there. So again, one solution is you can flip that and have events here. People from there can often get visas to attend here. That's an easier solution to the visa problem. If you're coming and you're meeting people and you're talking to people, even if you haven't met that specific project, you have a point of contact of, 'Oh, this person would probably know about that. I can ask them if this is a legitimate project.' And when you proceed to the next level, let's say you manage to do that, you manage to say, 'Oh, this person knows me, I can show you my GitHub, I can show you enough evidence that I'll get listed as a project,' you face the same problem multiplied across all of the Gitcoin funders, because every individual person who goes to donate at that website, they're looking at different projects and they're like, 'I don't know which one is a good project to support,' because again, they don't have that personal connection. And so I've said it several times now, but that personal connection is the foundation of addressing that. It's not the complete solution, because even as you build that out, that existing distribution of the community is going to be biased. Even if somebody is going to events and getting plugged in, they're spending more time around other people that they're closer to and they're just going to be thinking of those projects first. And we do see that projects that people are familiar with and know about get more funding just because people know about them. So the other thing we have to do is we have to build that pipeline into an amplification process where once people know about a local project here, they're amplifying, they're spreading it out to people who don't already have that personal connection and they're sharing it around. Even that is not going to be perfect. I've talked to several projects here who have been listed on Gitcoin and what they've discovered is that the amount of support they get through there is very variable. One time there'll be a lot of attention, they'll get a lot of support and they'll get a big amount of funding. The next time it doesn't show up. It's not consistent, so it can't be the basis of everything. But within the mechanism that Gitcoin is, I think we can improve that mechanism quite a bit by increasing the amount of contact between the global community and the local community here. Of course, the other things that Vitalik mentioned are also very important too. This is one area I am working to help bridge, but it's just one solution.
So as Vitalik said, I think it would be amazing for more local projects, entities being set up to even get closer to the more grassroots initiatives. I think we got to help bridge a lot of those worlds, and I hope the tide is shifting. I think more local gatherings and events and all of that that help create a gravitational point are valuable. Questions? Cool. Oh, okay, the mic is with you, and then yes, the next question.
Hi, Miss Purple again. So my question is more, since we talked about community a bit, outside of the developments in Ethereum, so outside of EIP-1559, the merge, and the Shanghai update, what on the social layer are you most excited about coming in the next, I guess maybe year or next few years? And perhaps just to kind of add on to that, do we have the right amount of the right people that we need within the community and within the ecosystem, or is there a gap that still needs to be filled?
I think there is still a gap on the UX side. If we look at wallets, there's MetaMask and there's a few other things, but there probably should be more things. If you look at making it easier for people to have self-hosted wallets that are actually secure without risking losing all their money if they forget their 12-word passphrase, there is ERC-4337, there is social recovery, and there is Gnosis Safe, and there is all these things, but we need user interfaces and we need to build wallets that actually use these things. Wallets that actually do a good job of interfacing between different Layer 2s. And I think also, there are existing companies that are making wallets and people that are doing these things, but often they're not close enough to different kinds of user groups. I ask some of them, 'How are you testing whether or not your social recovery implementation is easy to use?' and the answer is like, 'Oh, I ask my non-crypto friend.' That's better than asking their employee, but at the same time, that's still only one type of non-crypto friend, and it's still a very biased and limited sample of the kinds of people that could benefit from wallets with better UX. So the social part of that really is actually helping these projects and making sure that the direction that they're building is a direction that actually improves the user experience of people who need better user experience the most.
Speaking of social communities, I think the simple answer to your question is, is there a gap? Yes, there's still a gap. There's many different types of categories of people who have an incredible amount to contribute and yet don't have a natural niche. The best way that I can give an example of that is to go back in time and talk about the rise of NFTs. Because when NFTs came along, there were a lot of people who were previously working on technology-type areas who were able to participate, but there was also a whole new range of people who were like, 'Hey, this is actually a space for me where I can get into this and contribute and engage.' And it's been amazing for me to see the amazing communities that have grown out of that that have reached into other areas. Are we done with that? No, of course not. There are many other areas like this. Now the question of how we reach out and connect with them is a combination one. Obviously, we need to find things that are actually useful for people to engage with. When we build a technology and it doesn't actually serve a need that someone has, then unless they're personally interested in it or personally fascinated by it, why do they even want to become part of that community? But the other part of it is just about once you have identified something and you know that it fits, there's so much noise in this space. There's so much going on. I think a lot of people have probably encountered scams. They have family members who their only experience of blockchain or crypto is an experience of something really scammy. And the ability to wade through that differs a lot depending on the kind of person you are and the type of engagement, the type of knowledge that you have. So some of that needs to be addressed by becoming more open as a community about the ways that we distinguish those. I think a lot of times when you have somebody who's proceeded further in their journey and they've learned a lot, they become more of an expert themselves and so they get past the point that they are no longer taken in by a lot of these scams. But if you turn out and look around the people who haven't advanced to that point, they're very vulnerable to a lot of this stuff. And the ramp between the level of expertise and knowledge that's required to be fairly safe from a lot of that noise and when you're just starting is a really long one. And that ramp needs about as much support as we can possibly give it, because people need to climb up that to get to a place where they're not going to be easily taken in by things. And if we want different kinds of people to be able to contribute in our communities, we need to make it safe for them. So that I think is another big part of it.
Who here is from university? University students? Okay. I know some had questions for us. Back there, yep.
My name is Samuel. My question is about ZK technology. Recently, it's like everybody's kind of talking about it in the developer community. So I wanted to ask Vitalik if he can share more knowledge on that. What are the possible use cases, and should I ride into it as a student, someone learning also and building the community?
I think the answer is absolutely yes. So just to briefly explain what ZK technology is to people who haven't heard of it deeply before, it stands for zero-knowledge proofs, and it's basically a way to make proofs about information that you have without fully revealing the information that you're making proofs about. Even just a signature is actually a very simple, special-purpose type of zero-knowledge proof, because it's basically a proof that says, 'I control this private key,' but without actually giving up the private key so someone else can use it. Zero-knowledge proofs do things with just any kind of data in general. So if, for example, you want to prove that you know the solution to a math problem, then you can make a proof where the program that you're proving takes the solution that you know, it checks that the solution is correct, and the proof only verifies if the solution is correct. You send someone that proof and they know that you have a solution, but the proof only tells them that the solution is correct, it doesn't tell them what the solution is. This is a very powerful technology because I think it really combines together well with a lot of blockchain's weaknesses. Blockchains are a technology that gives these really powerful properties. They let you build applications that are open, permissionless, global, transparent, censorship-resistant, all of these things, but they sacrifice two very big things. They sacrifice privacy and they sacrifice scalability. Zero-knowledge proofs give you back privacy, and the kinds of zero-knowledge proofs that have been developed very recently, that are called ZK-SNARKs, also give you back scalability. One of the reasons why ZK-SNARKs are powerful is because it's much faster to verify a proof of a computation than it is to run the computation itself. And so this makes them useful for scaling Ethereum. All of the ZK-rollups use them. And the privacy side is really useful for solving some of the privacy challenges on Ethereum. If you want to prove something about yourself, like you want to do some kind of calculation about your reputation, you want to transfer some coin or some asset in a privacy-preserving way, if you want to do lots of things, then you can do it in a way that still is on-chain, gives you the benefits of being on-chain, but avoids creating this kind of public link where you reveal to everyone everything about the action that you're taking. And zero-knowledge proofs are the technology that lets you do that. So if someone's a developer and they want a kind of guide to how to use zero-knowledge proofs in some applications, on my blog vitalik.ca, I recently, I think about half a year ago, wrote this article, I think it was something like 'Applications of ZK-SNARKs for Privacy.' If you just go to the site and you can ctrl-F for 'privacy,' then you can probably find it. There's applications like a coin transfer system, a reputation system, a negative reputation system, privacy-preserving DDoS protection, a lot of interesting stuff. Privacy-preserving voting is in there too. A lot of these really powerful things can be done with a combination of blockchains and zero-knowledge proofs. So if someone is interested in that area, I definitely encourage people to get into zero-knowledge proofs and try to build applications that use them.
Thank you. I'm so sorry, there's a guy behind you from university who had a question, so we'll come back to you.
Hello everyone. My question is, I want Vitalik to explain to me what is a 51% attack.
Okay. So a 51% attack is this really important concept in blockchains. First of all, just stepping back a bit, what do blockchains do? Blockchains are an engine for agreeing on stuff when the thing that you're agreeing on is a thing that can be understood by a live running system, but it's not something you can mathematically prove directly. A big example of this is what's called the double-spending problem. Let's say I have 100 coins and everyone agrees that I have 100 coins, but then I create and sign a transaction that sends 100 coins to Chica, and then I create and sign another transaction that sends the same 100 coins to Jeff, and I broadcast both of these transactions. In order to have a functioning monetary system, it should not be possible for both of these to succeed, because if they succeed, then I've turned 100 coins into 200 coins. So what a blockchain does is it agrees on order. The blockchain comes to some agreement on which of these two transactions it sees first, it accepts that one, and it rejects the other one. This is what blockchains do, and this is why blockchains can be the backbone of digital currencies and other things, while the BitTorrent network, for example, cannot be the backbone of a digital currency. Now, what is a 51% attack? In order for the blockchain to kind of come to an agreement on which of these two transactions came first, there needs to be some kind of voting procedure. It's this very decentralized system and you have a large number of computers all around the world and they're performing the task of voting to agree on, did we see this transaction first or did we see this transaction first? There's rounds of voting, sometimes multiple rounds, sometimes it gets complicated, but eventually they reach an agreement. This voting procedure has an assumption, which is that the majority of people...
If the majority participating are honest, then the system works. But if the majority participating are not honest, then you could have a situation where they lie. For example, what they could do is they could first come to an agreement that my transaction to Chica came first, but then that same group could later on also come to an agreement that says that my transaction coming to Jeff succeeded. And when that happens, this is called a reorg, right? A reorganization where the block that contains the transaction from myself going to Chica gets thrown away. It's no longer part of the chain anymore, and the block that contains the transaction going from me to Jeff gets accepted and becomes accepted as being part of the new chain. Now, normally blockchains are kind of like convergent, right? So once they agree on something, they keep agreeing to it. And there's even mathematical proofs that say if either like 51% or 66%, depending on the assumptions, like if the majority of the participants in the system are honest, then once the system agrees on something, it sticks to that agreement and it doesn't go back. There is this concept, property called finality that Ethereum really cares about. But if this honesty assumption does not hold, and if the majority of participants that are doing this voting are dishonest, then they can agree on something and then later change their mind and then agree on something else. And like that process, this idea that a dishonest majority can just change its mind, it can block transactions, it can do all of these nasty things that completely violate what a blockchain is supposed to do, that's what a 51% attack is. And a big part of the job of a consensus protocol is to try to make 51% attacks as difficult and as expensive for the attacker as possible.
