What is Ethereum Casper?
Community Broadcast - Author: William M. Peaster
Casper is an application (also known as Ethereum 2.0) that will eventually transform Ethereum into a Proof of Stake (PoS) blockchain. Although Ethereum launched as a Proof of Work blockchain in the summer of 2015, developers were planning a long-term transition to a staking model. Once the transition is complete, mining will no longer be part of the Ethereum network.
To date, there have been two co-developed Casper applications in the Ethereum ecosystem: Casper CBC and Casper FFG. The CBC version was first proposed by Ethereum Foundation researcher Vlad Zamfir. Although research on CBC initially focused on PoS protocols for public blockchains, it has evolved over time into a broader field of work covering various PoS models.
Research on Casper FFG is led by Ethereum co-founder Vitalik Buterin. A hybrid PoW/PoS system was first proposed, but evaluations on implementing this system are still ongoing and as a result of new proposals, a pure PoS model may be preferred.
Notably, Casper FFG is the feature planned to kickstart the release of Ethereum 2.0. But this does not mean that Casper CBC will never be used. In fact, Casper CBC could replace or supplement Casper FFG in the future.
Although both versions were developed for Ethereum, Casper is a PoS model that can be adapted and applied to other blockchain networks.
How Does Casper Work?
The transition from Ethereum 1.0 to 2.0 is called the “Serenity” update. This update will consist of three stages. In the first phase (Phase 0) a new blockchain called Beacon Chain will be operational. Casper FFG rules will form the consensus mechanism of this new PoS-based blockchain.
Unlike PoW mining, where miners use expensive and specialized machines to create and verify blocks of transactions, the Casper app will mine Ethereum. Instead, the verification and validation of transaction blocks will be done by block validators, who will be selected based on their stake.
In other words, the voting power of each validator will be determined by the amount of ETH stake they stake. For example, someone depositing 64 ETH will have double their voting weight than someone depositing the minimum stake amount. To become a block validator in the first phase of Serenity, users will need to stake a minimum of 32 ether (ETH). This amount will be deposited into a special smart contract based on the previous Ethereum blockchain (1.0).
If all goes well, random committees of validators will be selected to create new blocks, and in return, these people will be given block rewards. Block rewards will likely consist only of transaction costs, as there will be no block premium.
However, we should also point out that each PoS application may include a different approach and a different reward model. The Casper model is still under development and has many details that need to be clarified.
Advantages of Casper
One of the advantages of Casper is that it will help Ethereum become environmentally friendly while enabling staking. The demands of PoW systems are very high when it comes to electricity usage and computing resources. In contrast, PoS models have much lower requirements. Once a full PoS model is eventually implemented on Ethereum, miners will no longer be needed to secure the blockchain, so the amount of resources needed will be much lower.
Another advantage of Casper is related to security. At its most essence, Casper will be used as a selector and will be responsible for ordering the blockchains. Essentially, Ethereum 2.0 will act as the ledger of the ledger. So if a validator acts with malicious intent, that person will be quickly removed and punished. In return for not complying with the rules, the validator will be penalized with the stake (in ETH) he has staked, meaning violation of network rules will be very costly. However, the developers are still evaluating the possibilities of a 51% attack.
Finally, some people argue that Casper will bring higher levels of decentralization to Ethereum. For now, the most powerful in the network are those who have the resources to run mining operations. In the future, anyone who can acquire enough ether will be able to help secure the blockchain.
Limitations
Casper has a long way to go before it is fully developed and implemented. Currently, its effectiveness and safety are still unproven. It has many details that need to be determined and arranged. We also can't be sure how it will look and behave until it is partially live in Phase 0 of the Serenity update.
In terms of theoretical limitations, Casper will not be able to finalize blocks if Ethereum's verification system is broken. Casper is not fully resistant to 51% attacks in its current configuration. Apart from this, an official specification is still needed to determine a fork rule that may be needed against attacks.
latest ideas
Ethereum is moving away from mining and towards a staking system, where users stake ether (ETH) to a deposit address to secure the blockchain. Casper is a technology that will be used to finalize blocks to enable this change.
Casper will help create the foundation on which future Ethereum 2.0 developments will be built and ensure a smoother transition to the PoS model. In addition, the open source nature of blockchain also means that the benefits of Casper can be permanently forked, modified and used by other projects to build on it.
When Casper is officially released, it will be a major milestone in Ethereum history. Regarding when Casper will be released, Ethereum researcher Justin Drake talked about the possibility of the first phase of Casper being released on January 3, 2020 (Bitcoin's 11th birthday). However, this is only an estimated date. Casper could be put into operation any time in 2020.
