The Ethereum project is conceived a crypto mega project which encompases a turing complete shared state machine(blockchain), content distribution and messaging.

The Ethereum project is conceived a crypto mega project which encompases a turing complete shared state machine(blockchain), content distribution and messaging. The goal of Frontier and the Ethereum blockchain is provide a viable host ledger for non-terminating state machine. The Bitcoin blockchain hosts state machines but they are guaranteed to terminate. An example of this is a unspent tx output hosted in a multisig smart contract.Spending the UTXO terminates the smart contract. Ethereum is attempting to build a ledger system where the transactions update the state of smart contract without necessarily terminating it. Applications: If successful the Ethereum blockchain and other users of the Ethereum Virtual Machine technology should be able host arbitrary consensus and have updates to the consensus depend on arbitrary sets of cryptographic proofs like signed transactions, votes, zero knowledge proof of votes, attestations signed by pinned keys etc. Challenges: 1. Gas Ethereum proposes a gas value to compensate miners who host and compute updates to the ledger state and limit abuse of their computational resources by network users. Optimizing the gas metric which sums computer,storage and network resources is NP Complete. It is an open question how closely one must approximate the optimum to have a healthy and usable system. 2. Centralization Ethereum faces centralizing effects around proof of work, memory burden from hosting and updating smart contracts etc. This will likely lead of conservatives about what kinds of transaction the network will accept in practice and limit use cases. 3.Security The surface area for attacks that trigger blockchain forks is vast and its difficult to full enumerate all the potential attacks and prove security