About Ethereum Casper
Casper is understood as the implementation that will eventually convert Ethereum into a Proof of Stake (PoS) blockchain (Ethereum 2.0). Although Ethereum was launched in the summer of 2015 as a Proof of Work (PoW) blockchain, the developers planned a long-term transition to a staking model. Once the transition is complete, mining will no longer be part of the Ethereum network.
There have been two co-developed Casper implementations in the Ethereum ecosystem: Casper CBC (Precise by Build) and Casper FFG (Ultimate Friendly Gadget). Originally, the CBC version was developed by the researcher of the Ethereum Foundation – Vlad Zamfir proposed. While CBC research initially focused on PoS protocols for public blockchains, it has since evolved into a broader area of research, including a family of PoS models.
Research on Casper FFG is being led by Vitalik Buterin, co-founder of Ethereum. The initial proposal included a hybrid PoW/PoS system, but implementation is still being discussed and new proposals could eventually replace it with a pure PoS model.
Notably, Casper FFG is the one who is being planned to start implementing Ethereum 2.0. However, that doesn’t mean Casper CBC won’t be of any use. In fact, it could replace or complement the Casper FFG in the future.
While both versions are developed for Ethereum, Casper is a PoS model that can also be applied and implemented in other blockchain networks.
How Casper works
The transition from Ethereum 1.0 to 2.0 has been dubbed the “Serenity” upgrade, which consists of three different phases. During its initial phase (Phase 0), a new blockchain called Beacon Chain will be launched. The Casper FFG rules will drive the consensus mechanism of this new PoS-based blockchain.
Unlike PoW mining, where miners run expensive and specialized machines to generate and validate blocks of transactions, the Casper implementation removes the mining process from Ethereum. In addition, the verification and validation of new blocks of transactions will be performed by block validators, who will be selected according to their amount.
In other words, each validator’s voting power will be determined by the amount of ETH they stake. For example, someone who has deposited 64 ETH will have twice the voting weight as someone who has deposited the minimum stake. Users will need a minimum deposit of 32 ether (ETH) to become a block validator in the first phase of Serenity – deposited into a special smart contract based on the old Ethereum blockchain (1.0. ).
Random committees of validators will be selected to propose new blocks and eventually receive a block reward for doing so if all goes well. The block reward will likely only include transaction fees as there will be no block subsidy.
However, it should be noted that each PoS implementation may offer a different approach, with different reward models. The Casper model is still under development and many details are yet to be determined.
Advantages of Ethereum Casper
One advantage of Casper is that, in a viable staking, it will make Ethereum eco-friendly. When it comes to electricity and computing resources, PoW-based systems are demanding. In contrast, PoS models have much lower demand. When a full PoS model is finally implemented in Ethereum, miners will no longer be needed to secure the blockchain, so the required resources will be much lower.
Besides, another advantage of Casper is related to security. In essence, Casper will be used as a selector, responsible for sorting blockchains. It will essentially act as a ledger of the Ethereum 2.0 ledger. So if a validator behaves maliciously, they are quickly removed and punished. The penalty for rigging the rules is a validator deposit (in ETH), which means breaking the network would be very expensive. However, developers are still discussing the possibility of 51% attacks.
Finally, some defend that Casper will give Ethereum a greater degree of decentralization. Currently, the strongest people on the network are those with enough resources to run mining operations. In the future, anyone who can buy the proper amount of ether will be able to help secure its blockchain.
There is a long way to go until Casper is finally developed and deployed. At present, its effectiveness and security have not been proven. There are many details that need to be identified and adjusted. Until a version of it comes online in Phase 0 of the Serenity upgrade, we can’t be sure how it will look and function.
Theoretically, Casper wouldn’t be able to finalize blocks if Ethereum’s validation system was broken. As it stands, Casper is still not completely resistant to 51% attacks. Additionally, an official specification is still needed to outline a fork rule that may be needed when responding to attacks.
Ethereum is moving away from mining and into staking, where users will stake ether (ETH) on a deposit address to ensure the safety of the blockchain. Casper is a technology used to finalize blocks that will facilitate that change.
Casper will help create the foundation upon which Ethereum 2.0 advancements will rest and is set to make the transition to the PoS model smoother. Additionally, the open-source nature of the blockchain space also means that Casper’s stated interests can be forked, modified, and built upon other projects in the future.
When Casper is officially launched, it will mark an important milestone in the history of Ethereum. As for when Casper might arrive, Ethereum researcher Justin Drake previously raised the possibility of Casper’s first phase launch on January 3, 2020 (Bitcoin’s 11th birthday). However, that date is a tentative proposal. The launch could happen any time in 2021.