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102

The fundamental flaw of Proof of Work (PoW) is that the costs of attacking the system are equal to what is spent to run the system. High security thus can only be achieved at high operating costs. The idea is that the honest participants just outspend the dishonest. This is already today highly inefficient, but it does work for Bitcoin. As soon as the ...


59

There are two key motivations for the move to Proof of Stake: Ethereum developers and researchers believe that consensus algorithms based on Proof of Stake (PoS) can provide a higher degree of security for a given amount of resource expenditure, compared with Proof of Work (PoW) consensus algorithms. Ethereum developers and researchers believe that a new ...


31

That is very complicated topic. Considered Proof-of-Work waste energy to maintain security of a public censorship resistant consensus ledger. Though there is a long standing debate about this point. You can see for yourself that Bitcoin consumes more than $1 mln of value per day. Energy consumption on hash calculations is estimated to be around Iceland's ...


27

you don't lose anything from behaving badly, you lose nothing by signing each and every fork, your incentive is to sign everywhere because it doesn't cost you anything. so as it doesn't cost you anything, it's a good strategy to work on each and every chain should a fork occur and double spend a digital good. Maybe the wiki explains it better : However, ...


24

The friendly Ghost Casper is a security-deposit based economic consensus protocol. This means that nodes, so called bonded validators, have to place a security deposit, an action called bonding, in order to serve the consensus by producing blocks. In Casper style proof of stake anyone can participate in block production by posting a bond. After posting a ...


19

Miners will receive transaction fees, along with (potentially) a small block subsidy. GPUs will no longer be useful, and CPU/RAM will be useful in that stakers will need to have close to perfect uptime and fast servers in order to make money. They will have to buy ETH, and stake it. The stakers will have to put down a deposit(stake), that cannot be used for ...


17

I did the math to show the aprox tx/s: The block gas limit is 7,999,992 Transaction costs 21,000 gas (let's assume nothing else is attached) That's ~380 transactions per block With a block time of around 15.03 seconds. As https://ethstats.net/ shows. This gives us aproximately: 25.346 tx/s. At the end of your question, you have mentioned some possible ...


15

A quote I like to use from Vlad Zamfir (one of the people building the CASPER protocol) is this: Tendermint favours consistency over availability, Casper favours availability over consistency (see the CAP theorem). Tendermint doesn't punish online validators for potentially censoring potentially-actually-just-offline validators. CAP Theorem states that a ...


14

Casper requires validators (signatories of the blocks) to be bonded, i.e., to have committed certain amount of Ether into the Casper contract. Validators vote by issuing special voting transactions to Casper contract, and these special transactions would be valid in any possible chains. Therefore, if two votes are detected from the same validator for two ...


14

In his DEVCON1 Keynote, Vitalik Buterin addressed the roadmap of Ethereum beyond the Frontier release: homestead, expected when the ethereum network, miners and other critical components work without serious hiccups for about 4 weeks. metropolis, with focus on the mist browser. serenity, Ethereum 2.0, with 4 primary research directions: casper, the proof-...


14

There are a number of reasons I much prefer Casper over PoW: In PoW, any coalition of >50% (or 25-33% if selfish mining) can very profitably censor and revert history. In Casper, it takes close to 100% of bonded validators to collude, to censor profitably. Additionally, finalized blocks cannot be reverted by any amount of byzantine behaviour. Casper is ...


13

An obvious way to scale a distributed database is to put transaction types that will never rely on each other into two separate databases. This is such a standard practice it's difficult to find a citation for it. But if we are using a PoW blockchain to store our data we cannot do this because the smaller shard will be less secure in proportion to its size ...


12

Somewhere between 2s and 7.5s, depending on what tradeoffs we choose between maximizing speed and minimizing consensus overhead. One of the important philosophical points imo is that very high consensus overhead is actually not that bad provided that (i) it's constant and not per-transaction, and (ii) light clients do not have to bear it; for example, even ...


12

tl;dr from Casper 101 [In proof of stake] if there’s a fork in the chain, the optimal strategy for any validator is to validate on every chain, so that the validator gets their reward regardless of the outcome of the fork. More details Proof of work requires CapEx (buy ASICs and other equipments) and OpEx (power and real estate cost etc) to participate ...


11

"Finalization" is defined cryptoeconomically; the degree of finality that a block has can essentially be quantified by "how much ETH will other validators lose if this block turns out not to be part of the main chain?" A fully "finalized" block is one where >2/3 of Casper validators will lose their entire deposits if the block ends up being not in the main ...


11

It's counterintuitive but PoS is fairer than PoW (as we know it). Economies of scale: a proportionate saving in costs gained by an increased level of production. http://www.investopedia.com/terms/e/economiesofscale.asp PoW miners have to invest their capital in hardware. The costs of running a mine is composed of fixed costs and variable costs. Fixed ...


9

A different explanation of Casper was written by Vlad. Some of the points from the post include: It is an eventually-consistent blockchain-based consensus protocol It favours availability over consistency It is always available, and consistent whenever possible It is robust to unpredictable message delivery times because nodes come to consensus via re-...


9

https://gitter.im/ethereum/research is an open, highly technical channel where the most details about Casper can be obtained currently. Here are some background references that can help before engaging in the above channel: https://blog.ethereum.org/2015/08/01/introducing-casper-friendly-ghost https://blog.ethereum.org/2015/12/24/understanding-serenity-...


9

GHOST is short for the Greedy Heaviest Observed Subtree chain selection rule which was a proposed modification for the Bitcoin blockchain (Paper). GHOST orignally was a protocol modification, a chain selection rule, that makes use of blocks that are off the main chain to obtain a more secure and scalable system. With that modification, it is possible to ...


9

EDIT: This answer is a bit old. Now we know much more about PoS and validation details, but don't hesitate to ask new questions on a new thread. Also, meanwhile Golem Network appeared and is a pretty way to recycle GPUs power (see the end of my answer where I express fear about GPU recycling). GPUs would then be used for what they were built for: rendering ...


8

In a naively implemented proof of stake, suppose that there is an attacker with 1% of all coins at or shortly after the genesis block. That attacker then starts their own chain, and starts mining it. Although the attacker will find themselves selected for producing a block only 1% of the time, they can easily produce 100 times as many blocks, and simply ...


7

The "processing power" of the EVM is unrelated to mining hashrate. Power is not an accurate phrase for the EVM, because what limits computation on the EVM is cost: gas used multiplied by gas price. The Ethereum protocol does not provide limits on what the gas price and block gas limit can trend to. Heavy computations are possible on the EVM, but they ...


6

Casper began life as an adaptation of the principles of GHOST to security-deposit-based PoS. The most complex version of Casper uses a subtree-choice rule, executes all transactions and includes bets from blocks that are included in the dependency graph of winning blocks, and can do sub-network latency confirmations. Vitalik's PoC of Casper is much simpler ...


6

Credit: @Vitalik in the Ethereum Research Gitter Chatroom: As of January 11, 2016: How should the staking rewards and penalties (more precisely, the parameters for the scoring rule) for CASPER be set? How many validators should CASPER have? Given this value, how should we target it? What is a good target level of participation (as in, % of all ETH staked)? ...


6

The proposed blocktime is 2-3 seconds. At least that's what Vlad Zamfir (Ethereum Researcher) is aiming for. There are more details on the subject in this epicenter bitcoin podcast #105 .


6

Quoted from Vitalik Buterin on Reddit: (https://www.reddit.com/r/ethereum/comments/4d5z1y/is_it_possible_for_bitcoin_to_live_on_the/) "BTC -> ethereum convertibility can be done fine; the hard part is the ethereum -> BTC conversion. There would need to be some kind of sidechain protocol that can "understand" receipts being created on the ethereum ...


6

My impression is that SPV nodes cannot be validator nodes for the reason you stated (proof that ETH is securing the chain requires knowledge of blockchain state). With Bitcoin and node can convert to or from a SPV node to a full node (or vise vera) at any time. SPV nodes can exist with Casper but they cannot be validating PoS nodes. SPV peers essentially ...


6

Yes and no. There's no way to enforce any given betting strategy in either PoS or PoW. For example, in PoW, there's no way to force miners to never mine on an attacker's chain. So, yes, a validator could be programmed to bet in any possible way. Betting doesn't quite work this way, however. There's been multiple versions of how betting works, what exactly ...


6

Here's a detailed post authored by an Ethereum researcher (with some bold added) https://medium.com/@jonchoi/ethereum-casper-101-7a851a4f1eb0 Casper FFG is what will be introduced in Ethereum first: Casper the Friendly Finality Gadget (“FFG”) — aka “Vitalik’s Casper” — is a hybrid PoW/PoS consensus mechanism, which is the immediate candidate for ...


5

In addition to economic finality - i.e. the economic assurance of an invariant, there is also subjective finality: a client's unwillingness to change their mind. Once a client sees a finality threshold of the security deposits behind some invariant, they can decide never to accept any claim to the contrary. There is no amount of expense an adversary can ...


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