What is Ethereum Casper?
Research on Casper FFG is being led by Ethereum co-founder Vitalik Buterin. The initial proposal consisted of a hybrid PoW/PoS system, but the implementation is still under discussion, and new proposals may eventually replace it with a pure PoS model.
Notably, Casper FFG is the one being planned to initiate the Ethereum 2.0 rollout. But, that doesn’t mean Casper CBC won’t be of any use. In fact, it may end up replacing or complementing Casper FFG in the future.
While both versions have been developed for Ethereum, Casper is a PoS model that may also be adopted and implemented in other blockchain networks.
How Casper Works
In other words, the voting power of each validator will be determined by the amount of ETH they put at stake. For example, someone who has deposited 64 ETH will have double the voting weight of someone who deposited the minimum staking amount. To become a block validator in the first phase of Serenity, users will need a minimum stake of 32 ether (ETH) - deposited into a special smart contract based on the former Ethereum blockchain (1.0).
It is worth noting, however, that each PoS implementation may present a different approach, with different rewarding models. The Casper model is still under development, and many details are yet to be defined.
Advantages of Casper
One advantage of Casper is that, in making staking possible, it will help Ethereum become environmentally friendly. When it comes to electricity and computational resources, PoW-based systems are very demanding. In contrast, PoS models have a 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.
Lastly, some people defend that Casper will give Ethereum greater levels of decentralization. For now, those who are most powerful on the network are those who have the resources to run mining operations. In the future, anyone who can buy the appropriate amount of ether will be able to help secure its blockchain.
There is a long way to go until Casper is finally developed and implemented. Currently, its efficiency and security are still unproven. There are many details to be defined and adjusted. Until a version of it goes live in Phase 0 of the Serenity upgrade, we can’t be sure of how it will look like and behave.
As far as theoretical limitations, Casper won’t be able to finalize blocks if Ethereum’s validating system becomes corrupted. As it is currently structured, Casper is still not totally resistant to 51% attacks. Other than that, a formal specification is still needed to outline a fork rule that may be needed when responding to attacks.
Ethereum is moving away from mining and toward staking, where users will stake ether (ETH) in a deposit address to secure the blockchain. Casper is a technology used to finalize blocks that will facilitate that shift.
Casper will help create the foundation upon which further Ethereum 2.0 advancements will rely on, and is set to make the transition to a PoS model smoother. In addition, the open-source nature of the blockchain space also means the outlined benefits of Casper can be forked out, modified, and built upon by other projects in perpetuity going forward.