What is Ethereum Casper?

Harry Tucker 18 January 2018 NEWS

Ethereum $1,000 - In text image1

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 Ethereum, 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.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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