So, What’s a Yellow Paper?
So, What’s a Yellow Paper?
We get many inquiries for collaboration from companies, and the first thing they give us is their white paper. But, more importantly, what is their yellow paper? Well, the main difference between a white paper and a yellow paper is that the white paper outlines the key methods involved, but the yellow paper gives the mathematical detail.
The classic “White Paper” was, of course, written by Satoshi Nakamoto:
In just 11 pages, Satoshi broke all the rules of the way we traded with currency. It was all there, and nothing was missing. It used ECDSA for digital signatures, and where any citizen on the planet could create their own currency wallet, and then, almost instantly trade (well, it took around 10 minutes for the actual transfer to happen). Okay. We now see its flaws, especially in its relative slowness and its proof of work method, but it has changed our world.
But, what about Yellow papers? For that we turn to Ethereum, and where Vitalik Buterin published its white paper in 2013, and, in 2014, Dr. Gavin Wood published the yellow paper. Vitalik showed the vision, while Gavin defined the science [here]:
Overall, the white paper is a better starting place, as you perhaps need to have a computer science background to understand the core concepts in the yellow paper. But, it showed there were real methods behind the white paper. And, in a nice nod to Hal Finney RIP, we see that the yellow paper defines a Finney as one of the multipliers of Ether:
It has 41 pages and is a fully laid-out specification of Ethereum. At its core is the concept of having a genesis block, and then adding transactions to define a new state. These new states are recorded as new blocks. In the following we define sigma_{t+1} as the next stage, and sigma_t as the current state, and then T is the transactions, and Υ is the Ethereum state transition function:
After the genesis block, we then chain the blocks together with a Merkle Tree. But we need a way to record these states, and this is achieved using a trie:
and which contains the data required to create the ledger. If you want to know more about how the trie works, try here:
The paper then covers the EVM (Ethereum Virtual Machine), gas payments for miners, the integration of smart contracts, and so much more. There’s nothing hidden — it is all open for review. I highly recommend you read it:
Conclusions
So, if you have an amazing new start-up, remember that the white paper is only part of your work. It’s the yellow paper that will truly define where you end-up, and where your innovation really lies. Anyone can talk a good game, but it is those with special knowledge who really understand how to disrupt our world. Bitcoin and Ethereum have done that, and have shown us a new (and more trusted) digital world.
Go, disrupt!