Big changes will be coming to Ethereum in the near future. The switch to proof-of-stake will occur through an initiative known as Casper. The first version of this technical solution has now been made available to the public. By collecting feedback from peers, the developers aim to make Casper as versatile as possible.
What is Casper Exactly?
For Ethereum, the switch from mining (proof of work) to proof-of-stake was always part of the long-term plan. While mining helps secure the network, it also uses a lot of electricity. At some point, it will become unsustainable to mine Ethereum due to the rewards never offsetting the costs. This is compounded by the hard-coded difficulty bomb which will make Ethereum mining extremely difficult, if not nigh impossible.
Switching the network from mining to proof-of-stake will occur through the Casper initiative. It will offer a hybrid approach with mining at first. In a later stage the mining component will be removed entirely. Proof-of-stake will protect the network by relying on people’s computing power. However, it is far less energy intensive compared to traditional proof-of-work.
There is a drawback to proof-of-stake as well. With a heavy reliance on economic theory to achieve security and consensus, its implementation needs to be flawless. The Casper developers are well aware of the risks s associated with this impending switch. To counter any potential problems, Casper will use a “programmed economy” model. Any network node attempting to attack the network – through malicious behavior or otherwise – will be penalized.
Gauging the Success Chance of PoS
Despite this less traditional approach to proof-of-stake, there is no guarantee of success. Penalizing misbehaving nodes is an important aspect of creating a secure PoS environment. Combined with a bounty bot, users who report malicious nodes will earn a small reward for keeping the network secure. Cryptocurrency is all about decentralization and community effort at its core. Casper aims to instill those values when switching to proof-of-stake, which makes for an interesting “social experiment”.
The future version of Ethereum will also require “validators”. Such a validator is required to hold 1,500 Ether in a wallet under their control. Any validator will use their own computing power to process and validate network transactions. This concept is similar to how miners currently operate on the network. The one difference is how the new model is far more energy efficient and doesn’t require dedicated hardware.
While Casper sounds promising on paper, there is still a lot of work to be done. This is the first “demo” of how proof-of-stake will be implemented in the coming years. The bounty system is unique, but it may not be sufficient to keep attackers out. Even so, this is an important step toward making Ethereum more secure and efficient in the future. Programming human behavior is still impossible to this very day, but Casper seemingly gets pretty close to doing exactly that.