Ethereum

1. How does a smart contract learn about a "fact"? In a betting example, say two individuals bet on a football game. How does the algo determine which team won? The wired article on ethereum says "it will determine the winner by looking up the score on the web". This seems like a bug fest waiting to happen. What if the endpoints it wants to query are down? How to avoid people trying to "fool" the algo by hacking the sites it's looking at for the "facts"?

2. How on earth do you intend to store everyone's data in a single blockchain? This is like having every application's database (not even the one's you use yourself) on your computer.

*edit - starting to get some responses here: http://www.reddit.com/r/ethereum/comments/21orz7/noob_questi...

The vision is that its a new platform for implementing crypto "contracts". The most basic contract is a simple send transaction. Multi-sig (m-of-n) addresses are another type of contract. Decentralized lotteries (think satoshidice 2.0) are another, and so on. In bitcoin, such contracts are implemented in "bitcoin script" - an assembly-like programming language with opcodes such as PUSH, POP, and CHECKSIG. So currently, if you want to write a bitcoin contract, you would have to hand-write it in this assembly language.

Ethereum is a vision to provide a higher-level language for implementing contracts - ECLL (Ethereum C-Like Language) - which compiles down to the assembly-like opcode instructions of "ethereum script". It will supposedly also have more flexible ways to store data/state (in bitcoin script, a contract's state is encoded as spendable or unspendable inputs and outputs).

In bitcoin, the central abstraction is the transaction: tx inputs and outputs are your memory address references. In ethereum, the central abstraction is the higher-level contract: your inputs and outputs are variables, and the ECCL compiler does the memory management and assembly opcodes.