Proof Of Stake Faq Ethereum/wiki Wiki Github
See A Proof of Stake Design Philosophy for a more long-form argument. No need to consume large quantities of electricity in order to secure a blockchain (eg. it's estimated that both Bitcoin and Ethereum burn over $1 million worth of electricity and hardware costs per day as part of their consensus mechanism). Because of the lack of high electricity consumption, there is not as much need to issue as many new coins in order to motivate participants to keep participating in the network. It may theoretically even be possible to have negative net issuance, where a portion of transaction fees is "burned" and so the supply goes down over time. Proof of stake opens the door to a wider array of techniques that use game-theoretic mechanism design in order to better discourage centralized cartels from forming and, if they do form, from acting in ways that are harmful to the network (eg. like selfish mining in proof of work). Reduced centralization risks, as economies of scale are much less of an issue. $10 million of coins will get you exactly 10 times higher returns than $1 million of coins, without any additional disproportionate gains because at the higher level you can afford better mass-production equipment. Ability to use economic penalties to make various forms of 51% attacks vastly more expensive to carry out than proof of work - to paraphrase Vlad Zamfir, "it's as though your ASIC farm burned down if you participated in a 51% attack". How does proof of stake fit into traditional Byzantine fault tolerance research? There are several fundamental results from Byzantine fault tolerance research that apply to all consensus algorithms, including traditional consensus algorithms like PBFT but also any proof of stake algorithm and, with the appropriate mathematical modeling, pr Continue reading >>
Beginner's Guide To Ethereum Casper Hardfork: What You Need To Know
The Casper updates mission is straightforward, then: to shift ether from being a PoW coin to a Proof-of-Stake (PoS) coin . As opposed to the PoW consensus protocol, the PoS protocol achieves consensus through stakerssometimes referred to as minters, toowho stake their coins by locking them down in specialized wallets . With these stakers at work, mining will become redundant, meaning the Ethereum network post-Casper will rely on stakers and staking pools instead of miners for its operability. And, like miners, stakers will be rewarded for their service to the network. Minters will receive an annual dividend of ether (collected from network fees), so staking would be a lucrative endeavor for those with enough coins. Naturally, then, the more ETH you stake, the larger your annual dividends will be. For now, Ethereums developers havent arrived at a hard number for the amount of ETH that will be required to stake. What they have confirmed, though, is that the number will likely start out higher before gradually being brought considerably lower. For instance, Ethereum founder Vitalik Buterin has recently thrown around a guesstimate of needing approximately 1,000 ETH to be one of the networks inaugural stakers. He said that number could be dropped down to as low as 10 ETH over time. Whatever the number ends up being, users will still be able to band together and create staking pools, just like there are robust mining pools in the Bitcoin and Ethereum communities today. Youll simply pitch your desired amount of ether in, lock in down with your peers, and rake in the dividends together (to be shared proportionally, of course). Well, the Casper update is certainly a team effort, but its inarguable that top Ethereum researcher Vlad Zamfir has been at the vanguard of the updates Continue reading >>
First Impressions Of Ethereums Casperproof Of Stake(pos)
Vitalik Buterin and Virgil Griffith have introduced a proof of stake-based finality system capable of overlaying an existing proof of work (PoW) blockchain. In their paper , entitled Casper the Friendly Finality Gadget, Buterin and Griffith explain that the first version of Casper (within Ethereum) could take on the form of a hybrid PoW/PoS system. The first available release of the alpha Casper Friendly Finality Gadget (FFG) testnet, built on pyethereum, achieves this. This hybrid PoW/PoS vision, albeit with only 14 listed nodes at the time of writing, can be observed on the following Ethereum Network Status Site . Installing Casper FFG on Ubuntu 16.04LTS Thankfully, the process of installing Casper FFG on Ubuntu as documented here  is relatively straight forward. This succinct installation process is thanks to the docker approach provided by Karl Floersch . Participating in the validation PoSprocess At present, my most significant hurdle to running a validating Casper FFG testnet node is not brought about by the installation process or commands. It is brought about by the fact that a validating Casper FFG node, on the testnet, must provide a minimum deposit of 1, 500 Casper FFG testnet ETH in order to participate in the validation process. As we mentioned previously, Casper FFG is a hybrid PoW/PoS system and therefore the Casper FFG node is able to be run in mining mode. The following gist contains a list of commands for mining Casper FFG testnet ETH using Ubuntu 16.04LTS. The following gist contains a list of commands for checking Casper FFG testnet ETH account balance (during/after mining). Of course, whilst mining is an option, it would be ideal if participants willing to try out the alpha Casper FFG testnet could have immediate access to the required Continue reading >>
When Will Ethereum Mining End?
In August of this year (2017), Vitalik Buterin, creator of Ethereum , released the implementation guide for the first version of Casper. As a hybrid proof-of-stake (PoS)/proof-of-work (PoW) algorithm, Casper v1 is going to decrease (and eventually end) the profitability for Ethereum miners . The release date is estimated to be sometime in 2018 as part of the Constantinople hard fork and theres a lot to learn before this happens: Casper is a PoS algorithm thats projected to be released on the Ethereum network sometime in 2018. Beginning as a hybrid with the current PoW algorithm, the first version of Casper will only use a PoS consensus to validate every 100th block, called checkpoints. Once a checkpoint is validated, theres no way to go back and use a chain without it. Even if 99% of miners support a chain that doesnt include a checkpoint block, all clients in the network will still continue to use the one with the checkpoints. This removes a lot of the power that miners currently have. The Ethereum community hypothesizes that the switch to PoS will help with the scaling issues that the network is currently facing. The algorithm should enable new blocks to be created more quickly while allowing the network to scale more efficiently through sharding. Sharding is a horizontal partitioning of a large database into smaller and more easily managed parts. Beyond that, PoS algorithms also use less energy to run the network, reduce centralization, and make 51% attacks more difficult. With the upcoming hard fork, there could potentially be three forks of Ethereum: And, if youre a miner, you may be thinking, No big deal, Ill just continue to mine and give support to the Ethereum PoW fork. The Ethereum developers have stated that theyll be releasing what they call the difficulty Continue reading >>
When Is Ethereum Expected To Switch To Pos? : Ethereum
Welcome to r/Ethereum , the front page of the Web 3. No inappropriate behavior. This includes, but is not limited to: personal attacks, threats of violence, gossip, slurs of any kind, posting people's private information. Keep price discussion and market talk, memes & exchanges to subreddits such as /r/ethtrader Keep plain ICO advertisements to subreddits such as r/ethinvestor . Keep mining discussion to subreddits such as /r/EtherMining . No creating multiple accounts to get around Reddit rules. English language only. Please provide accurate translations where appropriate. Posts and comments must be made from an account at least 10 days old with a minimum of 20 comment karma. Exceptions may be made on a discretionary basis. Continue reading >>
4 Answers - When Will Ethereum Change From Pow To Pos?
When will Ethereum change from POW to POS? So Vitalik, one of the founders of Ethereum, has been spending a lot of time talking about this on reddit and gitter.im . Based on his conversation, it seems that there will be a soft launch of POS in August or September (ie a hybrid between POW and POS) with the full transition happening by EOY. Vitalik has already created the POS repository to begin pushing code to prod: In addition, there is a timer built into the Ethereum code that effectively doubles the complexity of the hashing algorithm starting later this month. This will making mining much more difficult and an addition incentive to move to POW. By 2018, you can expect Ethereum to be POS. Originally Answered: Why would Ethereum change from POW to POS? Proof of Work (POW) is the current standard mode of operation set by most cryptocurrencies following the lead of Bitcoin. In this method physical hardware with high computing power is used to run an algorithmic program to get rewards. The net effect of this is that costly hardware run programs while consuming electric power and CPU cycles for unproductive work. Te network users running these programs for rewards are called miners. Proof of Stake (POS) seeks to switch from the mining process to a blockchain network supported only by users who validate transactions with no mining. This is a green and efficient method to run the network. Continue reading >>