Ethereum Casper is the app that will eventually turn Ethereum into a Proof of Stake (PoS) blockchain (also known as Ethereum 2.0). Even though Ethereum was launched in the summer of 2015 as a Proof of Work (PoW) blockchain, developers are already planning to migrate to a stock model. Once the transition is complete, mining will no longer be part of the Ethereum network.
So far there are two advanced Casper applications in the Ethereum ecosystem, Casper CBC and Casper FFG. The CBC version is tentatively suggested by Ethereum Foundation researcher Vlad Zamfir. Although CBC’s research was initially focused on public blockchain PoS protocols, it has since expanded into a much broader field of study and includes a range of PoS models.
Ethereum founder Vitalik Buterin is Ethereum Casper leading the search for Casper FFG. The initial proposal consisted of a hybrid system between PoW and PoS but the implementation is still under discussion and the new proposal may eventually be completed with a pure PoS model.
Notably, Casper FFG is the one who plans to roll out the Ethereum 2.0 release. But that doesn’t mean Casper CBC won’t benefit. It might even replace or complete Casper FFG in the future.
While both versions of Ethereum have been developed, Casper is a PoS model that can also be adopted and implemented on other blockchain networks.
How does Casper work?
The transition from Ethereum 1.0 to 2.0 is called the “Serenity” upgrade and will consist of three distinct phases. In the initial phase (Phase 0), a new blockchain named Beacon Chain will be launched. FFG’s Casper Rules will lead the consensus mechanism for the new Proof of Stake (PoS) blockchain.
Unlike proof of work (PoW) mining, where mining workers run expensive specialized devices to create and Ethereum Casper verify transaction blocks, implementing a mining process will remove Casper from Alaithiriom. Instead, new blocks will be validated and validated by the block inspector will be selected according to their quota.
In other words, the ability to select individual auditors will be determined based on the amount of ETH they set as a quota. For example, someone who deposits 64 ETH will have twice the voting weight of someone who deposits the minimum bet amount. To become a blockchain auditor in the first stage of Serenity, users must own a minimum of 32 ETH shares deposited into a private smart contract built on the Ethereum 1.0 blockchain.
If all goes well, a committee of random checkers will be selected to suggest new blocks and eventually they will receive a block reward for doing so. Block rewards will most likely only consist of transaction fees as there will be no rewards from the block itself (such as mining).
It should be noted, however, that each PoS application may offer different methods with different reward models. The Casper model is still under development and many details are yet to be worked out.
Casper Features
One of Casper’s strengths is enabling a staking system that will help Ethereum become eco-friendly. In Ethereum Casper terms of power and computing resources, PoW systems are resource intensive. In contrast, the PoS model requires less resources. When the PoS model is fully implemented on Ethereum, mining is not required to secure the blockchain, so much less resources are needed.
Another potential Casper feature is related to security. In essence, Casper will be used as a limiter, which is responsible for governing the blockchain. Basically it will act as a registrar for the Ethereum 2.0 ledger. So if the auditor acts badly it will quickly be removed and punished. The penalty for cheating the rules is the validator’s share (of the ETH coin) meaning network violations will be very costly. But the developers are still discussing a 51% chance of attack.
Finally, some argue that Casper will give Ethereum a higher level of decentralization. Currently the strongest on the Ethereum network have the resources to run mining operations. Whereas in the future anyone who can buy the right amount of ether will be able to help secure the Ethereum blockchain.
Limitation
There is still a long way to go Ethereum Casper for Casper to evolve and implement. Currently, the efficiency and safety of Casper is still unproven. There are many details that need to be defined and adjusted. We won’t be sure how it will look and how it will behave until the first release in Stage 0 of the Serenity Upgrade.