The first iteration of Ethereum’s Casper code was published today. What you may not know is: what exactly is Casper and what does it mean for the Ethereum network?
First of all, Casper’s essentially a unique way of describing the fact that Ethereum is changing their consensus protocol. What’s particularly interesting is it isn’t a complete change, in and of itself. After Casper is implemented, Ethereum’s current, Proof-of-Work protocol will remain operational and the only real difference will be that the network will also use proof-of-stake.
With the knowledge that Casper facilitates both of these protocols working at the same time, it becomes clear that Casper isn’t exactly a consensus protocol. It appears to be more of a bridge between protocols to enable two to operate in a concerted effort. Thus, some in the mainstream media seem to have branded it a “hybrid” protocol.
Even so, Casper has been branded as simply Ethereum’s Proof-of-Stake protocol, by certain leaders on the Ethereum project.
Even if this is taken as true, however, Casper appears different than most existing Proof-of-Stake protocols due to one key feature.
They plan to punish any sort of bad actor on the network.
Effectively, it all begins with Ethereum Casper’s version of Masternodes called, “validators.” Just like with any other Masternode type system, “validators” reportedly begin by staking a certain amount of their Ethereum on the network in order to earn their role.
Secondly, once it’s verified that they have staked the required amount, then the validators can begin “validating” blocks or confirming that the transactions on them are valid and the blocks should be added to the network.
It should be noted that the actual process of validating is where Casper’s uniqueness comes to light. If a validator finds a block that he or she thinks needs to be added to the chain, then he or she is required to bet a certain amount of their stake on this block. There is no way around this and betting nothing will apparently cause the validator’s stake to be directly penalized. This means that a validator who chooses incorrectly would most likely lose money and according to a report by Blockgeeks, this would loss would be calculated from a node’s entire stake.
On the other hand, if a validator chooses correctly, then he or she, according to reports on Casper, gets a reward that’s somehow equal in percentage to his or her original bet. Therein lies the incentive to continue participating in the network and therein lies the greater part of Casper’s uniqueness.
It’s logical to say at this point that other unique aspects of Casper won’t even be discovered until it is tested in real-time and it still hasn’t launched. A key hope as Casper moves forward is that it can fix the latency that often occurs at times of high volume on the Ethereum network. It’s too early to see whether this could occur yet as we don’t even have any live data to go off of but overall, Casper appears to be a promising change for the Ethereum network.