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John's got a background in math and.engineering has done lots of work in.software development previously a coin.base but now works at consensus.diligence auditing smart contracts I.first found John from some excellent.medium post that he's written about the.topic and wanted to know more about what.he had to say about the etherion.blockchain so his presentation today.will go over some of the foundational.concepts you'll need to understand this.field and his estimation of where it's.going so with that John take it away.[Applause].check check check check yeah we got the.mic how's that is this am i audible you.guys hear me awesome amazing thank you.okay without further ado I present to.you a brief history and future.potentially of smart contract security.hello I'm John online I tend to go by.Marillion with an underscore after it a.smart contract auditor it concerns his.diligence and we are part of consensus.which is a venture production studio.building on etherium yes so it's under.my mouth yeah I mean I can hold it if I.just think keep letting me know I guess.we'll get there so I'm gonna try and.move quickly this is what I'm gonna talk.about I'm gonna talk about how we got.here where we are now and where we might.be going in the future I can see how.when I look these get when I look over.here I'm more audible RNAi so the idea.in in January 2014.Vitalik butyrin published a white paper.describing his idea for a theory 'm a.world computer a next-generation.blockchain so if you think of Bitcoin.where Bitcoin has.this central concept of unspent.transaction outputs in aetherium it's.it's more about state so what what that.looks like.is state is essentially the accounts the.global state is a mapping of addresses.so in Bitcoin you have these addresses.in aetherium addresses map to accounts.with these properties and owns a balance.code and storage important to say this.right now that all data on the etherion.blockchain is public it's all out there.everyone can read it anybody running.aetherium has your data in their.computer so there are two important.types of accounts there are contract.accounts those have the knowns they have.a balance in ether they have they have.some code there that gets interesting.and they have storage values.non-contract accounts on the other hand.they're just an own sin balance there's.no code there's no storage there you can.think of contracts as being the the.computer programs in the world program.and you can think of non contract.accounts as being the private key.controlled accounts that humans will.typically use no code no storage so this.is what the byte code that is stored on.chain and belong in the contract looks.like this is the codes disassembled into.its op codes.and then the idea of a transaction in.Bitcoin there are transactions you send.around Bitcoin value in aetherium a.transaction should really be thought of.as a state-transition taking us from one.place to the next so a state transition.transition has to affect an account in.some way or else you're not changing the.state so it looks a little bit like this.in this case we have the same account it.has now it has some storage where it did.not previously and it has a balance so.important concept sending a transaction.to a contract executes its code.so it's see how that happened so you are.running that code when you send a.transaction to that contract and that.contract can then in turn send another.transaction to other contracts except we.call the message calls but really for.all intents and purposes you can think.of these as transactions as well so you.have a human he has a boring old.non-contract account and he sends a.transaction to a contract which may send.a call to another contract a couple more.contracts and could send calls to more.contracts and more contracts and more.whoa what what's happening here so this.is a good impetus to keep our this is.programmable money we have here right so.we are writing code that sends actual.real-world value and has real-world.consequences so we really need to think.about the complexity that we program.into our systems and how much is really.reasonable and can be reasoned about.this complex process must happen.deterministically to keep thousands of.nodes around the world in consensus.about the state it's not as easy as it.sounds so how do we build this complex.system so we needed a decent.specification so Gavin wood wrote the.yellow paper this really filled in a lot.in the white paper unfortunately it's.really not the friendliest document to.read instead of pseudocode he has a.preference for essentially hieroglyphs.but it's all there it's all there and.and and it could be used to to build the.system so we have a pretty good.specification May 2015 so people come.together they're building these systems.using the specification May 2015 the.Olympic test net launches the test net.is this is sort of pre aetherium and.test nets are an important concept.because there's there's aetherium the.main net where all the money is and then.we have the this concept of test that's.where people really just agree that.they're worthless there's literally it's.the same.in code it's the social contract says.there's no value on these test nets so.the Olympic test net predates etherium.now we have a test net cord Robson.it's named after a terminus station.because it should be your last stop.before the main net security factoid.best practice includes deploying and.testing contracts on a test at first.that makes sense.staging environment so a frontier launch.this is the actual aetherium network.July 2015 with implementations of the.client in multiple languages so we had.C++ Python go it's pretty impressive.that we have these three different.implementations completely in agreement.about state it's controversial to the.Satoshi said so much depends on all.nodes getting exactly identical results.a second implementation would be a.menace to the network so why why do we.have multiple implementations so it's.important to think about the trade-off.multum implementations reduce the.probability of a consensus bug because.we're running the code in Python ingo in.C++ so we're more likely to catch any.errors beforehand but once we're on.chain if any of these nodes go out of.sync we've got real problems and it does.happen from time to time and it requires.some pretty significant community.mobilization to get things under control.and so then in our progression.higher-level languages begin to appear.because nobody wants to write in.assembly code so solidity I was.surprised but I looked at the timeline.as far as I can tell solidity was.actually the first higher-level language.to appear there's this terrible meme.that says that solidity is like.JavaScript and that meme needs to die in.a fire it's nothing like JavaScript I.don't I won't go into that but LLL it's.a sometimes called a low-level language.a lovely little language a lisp like.language all of these things are true.this was released in March 2014 serpent.this is this is metallics own creation.is Python esque very readable also you.should never ever use it.serpent was audited a few months ago we.have found the serpent project to be a.very low quality it is untested there's.very little documentation and language.design it's very flawed it should not be.considered safe to use unless many.critical problems are fixed and they're.not going to get fixed it's basically.just a throwaway but and so the.ecosystem this is this slide is meant to.entail that look how much is happening.and the ecosystem is maturing now this.is an interesting story so how many.people are familiar with the DAO okay.how many people know what the DAO really.actually was and what happened to it.okay good so there's a point to this.great so the DAO is a digital.decentralized autonomous organization a.form of investor directed venture.capital fund so what that means is we've.put these contracts on chain and people.can buy into this system and then they.become investors and also they have.control over that system and they can.decide where the money goes and they.stake in that and this is evidently the.best idea ever and we're all going to.get really rich people put a hundred and.thirty million dollars worth of ether.into this system breaking all records.and at the time I don't recall but it.was a tremendous portion perhaps.something like 10 percent of the yes I'm.correct something like 10 percent of all.the ether in existence and this tended.this drove the price up I mean for one.reason you're just locking the funds.there you can't sell it it's stuck in.the contract for now and then all.everything went to hell.so this price this price crash was a.result of a hacking of more than 50.million dollars from the the Dow so so.what happened there first brief.diversion I'm going to cover really.quickly some smart con.Rock Security Essentials so one very.important concept we have gas this.solves the halting problem on the world.computer when everybody is on the same.computer running the same programs or.can publish their own programs how do.you prevent people from publishing.things that will run in an infinite loop.yes you meter the instructions the.operation so if you want to add that's.going to cost you three gas if you want.to load something from storage that's.going to be 200 gas you want to create a.new contract that's 32,000 gas so this.is how you know if your code is too.complex it's eventually going to run out.of gas.this concept is somewhat analogous to.two fees in Bitcoin so you pay this you.pay it in ether when you initiate the.contract yeah yes and then important.concept is that each block so it's a.blockchain roughly every 13 15 seconds.in etherium we have a new block but.there's a maximum amount of computation.you can do in a block and that's about.seven and a half million gas delegate.calls so new concept delegate calls this.is a form of code reuse on chain so a.delegate call would be contract a can.delegate call to contract B and what.that does is it runs the code from B in.the context of a so a has this state it.has a balance of one ether it has these.storage values but it will run so the.code in B will run as if it has these.environmental variables within it the.way I like to think of it is a says hey.B what would you do if you were me and B.says these instructions please those.might not even be valid off codes I have.a self-destruct important concept some.contracts can destroy themselves if you.put that instruction in a contract and.call it in a future date it will just.delete itself from the chain and then.reentry so this is recursion that can.happen on aetherium.and i'm not going to be going depth here.but let's think of it like this so.you've got a victim.contract so we've got this victim.contract and an attacker here so the.attacker is going to call withdraw the.attacker we assume has a balance of some.sort so then this this contract will say.okay well what's your balance okay cool.yeah go ahead you can withdraw that and.then this call message on sender call it.calls out to here and the attacker so it.gets the value it asked for and then it.it goes ahead and calls back in because.the victim has not decriminalize.out-of-order ruins everything it's it's.a very subtle mistake and it was not it.wasn't something we really were aware of.from the outset this is a great blog.post published on June 9th that really.described the problem I think that this.is one of the first places where it was.brought to light I think there's some.great github issues to be read as well.so it was about a week later someone.read this thoroughly put their stuff.together and started emptying the.contract was a very exciting day and so.this is just an interesting aside but.but this is sort of like a security kind.of emergent property where the community.there's this group of people called the.white hat hat the whg the white hat.group and whenever there's a hack they.kind of just show up and try to out hack.the hackers so so they saw what was.happening and they mobilized and started.also emptying the DAO stealing the funds.put it into a safe place and eventually.returned it to people as much as.possible another consequence of this was.the DAO fork so the community was.tremendously split about how to handle.all these stolen funds it wasn't all.returned so ultimately a consensus.change a change was made to the.consensus algorithm this split the chain.we we get these two different chains.these two different histories these two.different communities emerged out of it.it's fascinating ok so more recently.most I'm going to do the second parity.hack I took the first one out.so multi-sig contract multiple people.can put their funds into a contract.together and say require four out of.five or some M of n to make a withdrawal.and the parity multi-sig contract it.most of the actual functioning code was.a secondary contract a central contract.which all these other instances of the.multi-sig of the parity multi-sig.contract would call for instructions to.handle the calls that it got the flaw.was that this library could.self-destruct and there was a fair like.it I won't go into it but it is really.quite sad it cost about 230 million.dollars and now this wallet is like what.do I do.where's where's my instructions so all.this money is frozen in these wallets.it's it's it's not moving anytime soon.so quickly though I like to say this is.not stupid these are excellent.developers these are the parity team are.really incredible developers building.really incredible software and cutting.some corners and not being very careful.in this case yeah so what a journey.that's where we've been that gives you a.sense of the history it informs the.culture it informs the security.practices around the etherion blockchain.and we talked a little bit about what we.have today it's gave me pretty quick.other speakers will probably go into.more detail so solidity Slee has.recently been audited it was found to be.pretty solid so we have a pretty good.compiler best practices these are the.consensus best practices this is a.community managed set of documentation.it encodes all the best practices that.we know for putting secure code on the.etherion blockchain we've got some great.reusable slowly frameworks out there two.excellent teams building a really good.reusable code.we have this tool called mithril it's a.static analysis tool you'll learn more.from mark about what that really means.under the hood but this is great it's.fun to use and it sort of breaks down.the pathways in your code emerging.languages this is like I mean this is.really sexy just because I get really.excited about different ways of.targeting the EVM with a human readable.language so bamboo bamboo is a project.of yo Ichi it dr. yo Ichi at the.foundation makes stank transitions.explicit and avoids re-entrance problems.by default so it's really basically a.built in state machine and apparently.you can't pull off free entrance e Viper.Viper is the spiritual successor to.serpent is another Python s language.it's in this experimental program.language that aims for some of the.following goals security simplicity.auditability it is in the process of.being formally specified I'll talk.quickly about that a little bit later.but I'm very excited about the future of.Viper Babbage is a mechanical smart.contract layer so you can drag and drop.in and like program your language like.this I don't know if you would call this.a domain-specific language but it's one.of what I believe will be more.domain-specific languages coming if.that's what this is formal verification.this is a it seems it's new to me in in.security but it seems to be coming out.of academia and and aetherium is really.driving I think a lot of research in.formal verification so that's very.exciting to me so the formal.verification in essence is by developing.a rigorous model of the language.including EVM say transitions you can.prove higher-level properties about the.EVM code with respect to the model so.basically you can do math and prove.theorems to say yeah this see this like.this bad state in which that you never.want your contract system to get too.that's impossible it is unreachable so.great project kay EVM they're doing.wonderful things and they intend to.extend their verification up to vipre so.that we'd have right from from from.vipre down to the vm 'if Isabel this is.another exciting project and somebody.that consensus is currently working on.something that would take lll to the EVM.through a formally verified pathway so.also very exciting on chain privacy I.said before we don't have it we recently.kind of got it so we have these.primitives that are available to us now.they're very very expensive in terms of.gas but they enable us to do really.great things so if you're familiar with.Z K Z cash this gives us zero knowledge.proof ZK snarks honestly I don't know.how people are gonna use it yet but.they'll figure out some cool stuff I'm.sure ring signatures as well so shout.out to another blockchain Manero that.does ring signatures and privacy that.way quite effectively.I think I'm wrapping it up now yes so.this is to me I'm still sort of.formulating what that what this really.means but where I think it's all going.is towards these three pillars of making.the ethereum blockchain really work and.fulfill its mission so that means.correctness the code does what it does.what the developer thinks it does it's.transparency.clarity might be a better term for this.this means like my mom knows what the.contract is going to do and then she.actually trusts that it will do that.thing and once we're able to unlock.those things I think we really will see.the potential for these fascinating.interesting new models of collaboration.come to fruition and so we're hiring.we're right at the center of the action.where consensus everything we do is on.ethereum and tom talked to him as well.if you'd like thank you very much.everybody.that's my talk.[Applause].anybody want to ask a question then not.go overtime amazing you oh okay this.isn't me actually has a question.I don't know if this is on.sorry sorry yes.so how how exactly is your mom supposed.to know what a contract is gonna do like.where where's the translation there's a.reason that that was one slot or one.line on the last slide I'm kind of.curious yeah I know so in my mind in my.mind it's something like rap genius I.don't know there's some way that we make.it without that like people develop.trust in their ability to explain what a.contract does to normal people I could.be wrong though that but sorry did you.want to challenge me yeah I was just.hoping that there was some more there as.far as like a translation of common.language right paper where in my mind.ya know it's we got to get there I don't.know what is though Brendan okay.question is crypto kitties and scaling.um I mean it's a complex it's a massive.contract system and as far as I.understand it it creates contracts.that's a really expensive thing to do.and every contract has like like kitties.have a lot of they're very stateful.because it's like you know how long is.their hair and what color is it so you.have to be able to track all these.variables and that's the most expensive.thing you can do on chain I so I think.like gasps optimization is a fascinating.very fun thing and we're just gonna have.to do more of it and there's gonna be a.lot of other kind of scaling work to be.done it's not my forte.I think that's all yeah time for so find.him at the far thanks thank you John.good thank you Dan.[Applause].

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