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A Summary of

Ethereum Casper 101

by
Jon Choi
Medium
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Proof of Stake and Casper Overview

  • PoS is a consensus mechanism for public blockchains where an individual’s ability to mine by validating block transactions is equated to the stake they own in the network.
  • PoS differs from proof of work (PoW) in that it does not require so much electricity consumption and emission.
  • Casper’s goal is to implement proof of stake in Ethereum, which is still predominantly a PoW chain.

2 Caspers

  • Casper the Friendly Finality Gadget (“FFG”) is a hybrid PoW/PoS mechanism where the blockchain would grow every block with the PoW algorithm, but every 50 blocks validators assess it via PoS “checkpoint.”
  • Casper the Friendly GHOST: Correct-by-Construction (“CBC”) – here protocols are partially specified in the beginning, while properties of the system can be further derived through the implementation of a safety oracle.

Advantages

  • Increased economic security
  • Reduced risk of centralization
  • Energy efficiency achieved through sharding
  • Better recovery properties
  • Transition from PoW
  • Maximizing cost of attack
  • Minimal synchronicity assumptions

Challenges

  • Long-range attack – a mechanism that makes a longer chain that rewrites the ledger in the attacker’s favor, often going much further back in the chain’s history.
  • Nothing at stake theory – validators are expected to build on every fork because it is in their financial interest to do so; unlike in PoW, it costs nothing to validate on multiple forks – this means the validator gets the reward regardless of the outcome of the fork.

Solutions

Both of these challenges are resolved via ideas from “slasher.” - Validators are known, which allows for fault attribution. - “Slashing conditions” help disincentivize specific actions and provide accountable safety.

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