What is Ethereum Casper?
Ethereum's due for a big update called Casper, that should help it scale up.
Ethereum is facing problems similar to that of bitcoin – its strikingly fast rise in popularity has resulted in scaling problems that will need to be fixed fast if it is to become widely adopted.
In early December, Cryptokitties, a game built on Etheruem, became an overnight sensation. However, the magnitude of traffic that created also brought down the entire Ethereum network.
If Ethereum can’t keep up with one mildly popular game, it has no hope of becoming something much bigger.
Ethereum's founder Vitalik Buterin and key researcher Vlad Zamfir both believe they have the solution in an upcoming update to Ethereum called "Casper".
What is Casper?
Similar to bitcoin, Ethereum’s Ether is currently a Proof-of-Work (PoW) coin. This means Ethereum miners need to secure consensus on the network and keep it up and running. They do this by solving complex computer algorithms.
Casper's biggest change will be shifting Ether from being a PoW coin to a Proof-of-Stake (POS) coin.
There are two parts of the Casper update to Ethereum. Floersch's part is known as Casper FFG (Friendly Finality Gadget) and is responsible for the Ethereum network's transition between Proof of Work to Proof of Stake. This will be the first part of the Casper update.
The second part is known as the Casper CbC (Correct by Construction) and will be responsible for managing Ethereum's consensus after Casper FFG has been implemented.
These moves will ease scaling issues with Ethereum by moving off mining consensus, the creators claim.
What other issues does it solve?
Another big concern for Ethereum is its use of electricity. The electricity needed by miners to run the Ethereum network is reputedly enough to power the entire country of Mauritius for an entire year. As more mining is required to keep up with demand, this power usage would continue to increase. But with mining not needed anymore, this is no longer an issue.
This also means that costs per transaction should drop as well. PoS methods mean validators can be used at a fraction of the cost.
At the time of writing, the author has holdings in NEO, RaiBlocks, Ethereum and NAGA Coin.