The Taipei Ethereum Meetup
Vitalik Buterin is one of the biggest players behind Ethereum, he is one of the founders and currently working as lead developer. Vitalik Buterin showed up at the Taipei Ethereum meetup, where he made a statement that the prerparation for Proof of Stake are now 75% complete. This is good news for all the people who are expecting the release of Ethereums next stage.
Where is Ethereum heading towards?
This is not the very first time where Ethereum came into news headlines. In one of the recently held interviews, Hudson Jameson, another founder and a member of the Ethereum Foundation, gave an insight about the cryptocurrencies development. He explained how the roadmap for Ethereum will look like in 2017. Within a period of six months, they are looking forward to release the next version of their code, which is called Metropolis. After that, the consensus protocol will be switched from proof of work to proof of stake.
At the Taipei Ethereum meet up, Vitalik Buterin confirmed what was stated by Jameson. He emphasized the fact that Ethereum will switch into a proof of stake protocol. This will probably happen towards the end of 2017. Moreover, Vitalik Buterin said that the team is currently working on a daemon that interacts with a smart contract and has the ability to send transactions directly into them. This will be completed in the first phase of the project and the smart contract is named Casper. During the second phase of the project, Vitalik Buterin and the team will start writing to clients in order to create awareness about these smart contracts. This statement made by Vitalik Buterin gained much attention at the Taipei meet up, where more than 500 members who are focused about ETHs future were present.
What is proof of stake and Casper?
Casper is not a new concept, the developers of Ethereum have been working on it since 2015. It has taken almost two years for the team to come up with measurable results. Proof of Work and Proof of Stake can simply be defined as consensus protocols, which have the ability to allow miners or stakeholders to come to a common agreement upon different issues. This can increase the overall efficiency of the process, which can benefit both parties at the end of the day.
Under a proof of work protocol, the miners will need to allocate the hash power in order to confirm and verify transactions taking place. Proof of Stake works in a different way when compared to it. It gives the main power to stakeholders. Therefore, hash power of the miners would not be used in order to confirm and verify the transactions. Within a Proof of Stake protocol, miners don’t exist. The leading stakeholders verify transactions while abiding the rules.
What can you expect from proof of stake and Casper?
The economic issue associated with switching to Proof of Stake or Casper would come down to incentives that are offered to the stakeholders. It determines how the stakeholders benefit or are incentivized to confirm and verify the transactions.
According to Buterin and the Ethereum Foundation, a proof of stake system is a place where everybody has the role of a miner. As a result, they will have to work according to the rules. If not, they will be losing their stake. In other words, all the users will have to confirm and verify transactions in a reasonable manner. This is some sort of decentralized system of governance. It has the potential to increase the participation of stakeholders.
When will the changes come into play?
According to the interview held with Buterin on January 18th, Casper will be tested across all 7 clients when the development activities are completed. If the testing ends up on a positive note, the developers will proceed. They will soon be able to release the final code. Therefore, we can expect the changes to come into play by the end of this year or at the beginning of the next.
At the moment, a variety of blockchains including BitShares or NXT are operating based on Proof of Stake. On the other hand, some other blockchains use a hybrid system, which incorporates the features of both Proof of Stake and Proof of Work. Such a hybrid solution has the ability to enhance the overall efficiency of the network as well.
Blockchains in today’s world have got the need to try out proof of stake. The obvious benefits that come along with it have contributed a lot towards its popularity. However, it is important to keep in mind that pure proof of stake is a security threat, which needs to be mitigated. Otherwise, the blockchains would fail to get all benefits associated with proof of stake. These problems are inherent to the algorithms used; hence some significant changes should be done. If they are achieved, proof of stake protocol might become even more popular and hybrid versions could be eliminated.