Proof of Stake thanks to Casper: the future of the Ethereum

After years of development, the consensus algorithm from the Ethereum network is now to be updated to Proof of Stake. Ethereum: Vitaly Buterin, the inventor of cryptography, recently published an article stating that a hybrid system will soon be put between Proof of Work and Proof of Stake. The consensus of Bitcoin Mining, which is known as proof of work, is to be combined with a Proof of Stake system known under the name Casper. In concrete terms, this means that 1% of the blocks are to be secured via Proof of Stake.

Parallel to the Ethereum developer Vlad Zamfir, Buterin has presented his version of the Proof of Stake system. According to Karl Floersch, a developer at ConsenSys, who is also part of Casper, the network with Casper will be the first choice for the more secure variant - not necessarily the more revolutionary:

"Ultimately, Vitalik has a well-functioning version of the Proof of Stake consensus, which, however, may not be as revolutionary as that of Vlad. "

What is the specificity of Proof of Stake? Ultimately, you can imagine it as a kind of "virtualization" of mining. Proof of Work is the classic consensus protocol and the basis of the mining process: Miners are looking for a block that meets certain conditions according to the Difficulty. For this purpose, a nonce named counter is varied, in addition to the transactions that are to be summarized in the block, until a calculated checksum - the hash - has a structure corresponding to the conditions.These calculations cost money for equipment and electricity.

In the proof-of-stake process, stakeholders are ultimately investing money in this consensus process. The money is not put into power and equipment. In Casper, virtual miners are called virtual miners to make their money available to the system: They know that they lose their money if they do not play according to the rules of the consensus. Caster's first step The first step in Buterin's plan is to use Proof of Stake as a kind of checkpoint: every hundred blocks are checked as a sample to see if the blocks contain correct transactions. Flocher is currently working on the so-called "Fork Choice Rules" for Pythereum, the Ethereum client in Python. These rules determine how validators choose the correct chain to add blocks.

Validators look at these different versions of the blockchain and make a decision which is the correct one. The amount of ether connected to a blockchain version is an orientation in this choice.

But be careful: Validators who choose the wrong blockchain lose money.

"A consensus and a single chain are found, instead of constantly forming a new fork," says Floersch. The SmartContract, which regulates this, is published by the Casper developers at Ethereum. Each Ether can deposit as deposit and participate in the virtual mining process.

Once the Pythereum version is complete, the whole thing should be implemented in the Casper Deamon. This package can then be used with any Ethereum client.

Will it work?

Of course there are also some challenges with the Proof of Stake concept. If all this does not work as planned, this would mean that transactions or entire Smart Contracts are not processed correctly.
Others see the planned hybrid approach of sharing Proof of Work and Proof of Stake critically.

On the part of IOHK, a company that works a lot on Ethereum Classic, there are corresponding concerns: "Such an introduction in installments is, in my opinion, not useful. One is either convinced by a consensus algorithm or leaves it. Adding a non-tested component to the network is a stupid idea. Where is a real peer review? Which conferences were presented with a good white paper? What feedback did they receive? "Despite the corresponding criticism, Ethereum sees the future not only rosy, but sees much potential beyond the search for a consensus in the proof of stake mechanism:" Of course, Proof of Stake is a very interesting problem, but I do think that there are clearly more applications within the framework of the Crypto-Economy, the school behind Casper. In this regard Casper will be only a first step."

English original version of Alyssa Hertig via CoinDesk