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 ...


51

Let us start by what they have in common: they are both algorithms for reaching consensus on the blockchain. Without going into too much details, we need consensus because anyone can create a block; while we only want an unique chain, so we want a way to decide which block we should trust. Proof of work has the nice property that you can use Bayes' Theorem ...


40

From reddit post 60 million + 12 million + 18million = ~90million 60 million - is the Pre-sale. 12 million - is the dev fund, 0.2coins per 1 coin sold in the crowdsale. ~18 million - 1 million coins mined per month for 18 months prior to going from POW to POS. Update #1: 91,018,773.78 (April 25, 2017). Update #2: 97,017,191.75 (Dec 13, 2017). Some ...


31

The goal of a consensus algorithm in a public blockchain network is to let many different users agree on the current state of the blockchain even though they don't trust each other or any central authority. This is a challenging problem, and until the Bitcoin network was launched, it had remained unsolved. Bitcoin's solution was to use something called ...


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

Shard is a concept not so much related to the Proof-Of-Stake, but rather to the scalability improvement. The idea of 'sharding' is to split the space of possible accounts (contracts are accounts too) into subspaces, for example, based on first digits of their numerical addresses. Each shard gets its own set of validators (therefore PoS is a pre-requisite), ...


25

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 ...


24

The issuance model is not fixed yet. It is an ongoing discussion whether or not the costs for the consensus needs to be financed by inflation that basically taxes every coin holder or if transaction fees are sufficient. Please note that the costs for secure consensus are much lower with Casper compared to current proof of work. More details here For this ...


18

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 ...


16

Block time in Ethereum's Proof-of-Stake system (called Casper) is being conservatively targeted at around four seconds. Vlad Zamfir of the Ethereum Foundation believes the block time will ultimately end up being much lower (sub-second) while Vitalik is not as convinced on that front. Vlad discusses this in this excellent video explaining Casper: https://...


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

From StephanTaul on the Ethereum Forums on September, 2014: There is no maximum. 60,102,216 ethers were created during the sale, plus 2x pools of 9.9% each. 26% of 60,102,216 will be created through mining every year. This means that 15,626,576 will be created every year on top of the 60m and the two pools. After a while, 15,626,576 ether won't ...


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

Short version - POW requires miners or physical computer to be turned on and processing the transaction. This can be inefficient since better computers are created and optimized for mining which may lead to centralization such as bitcoin. Bitcoin maybe viewed as centralized in China by a small group of people holding the mining power which may be greater ...


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 ...


13

The difficult bomb was actually added in a hard fork shortly after Ethereum's launch. It's not a necessary part of the protocol, and so if PoS isn't ready on time, it's most likely that another hard fork will delay or remove the bomb. In fact, if a portion of the Ethereum community desires to still use PoW, or does not agree with the final PoS protocol, ...


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

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

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 ...


10

It's a joke. However, Ethereum does eventually plan to move to Proof of Stake, which is intended to replace mining.


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

the_truth = Agreed data structure (Block) containing valid future state of the ethereum virtual machine (and related information) as calculated by me using the rules set out in the yellow paper. rand = 8 byte random number Proof of Work: I'll race you to find the hash value of the_truth+rand that is less than the agreed difficulty level, prize for the ...


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

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

The biggest risk is, as in Proof-Of-Work, centralisation. Centralisation of staking power in the 'hands of few' with the very deep pockets. To mitigate this risk, Ethereum founders decided not to engage venture capital on the early stages (and hopefully on any stages). Another measure was to hopefully create a diverse enough initial distribution of Ether in ...


9

Other answers have covered the topic well and 2 things to clarify: The current issuance rate is known: 5 ETH every ~15 seconds (Bitcoin is currently 25 BTC every ~10mins). With any changes to Ethereum, such as the transition to PoS, the issuance rate is guaranteed to not increase. But it may decrease, possibly to zero or something much less than 5 ETH, ...


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 ...


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