Ethereum’s Casper update is within the reach. It can already be activated with the nearest planned Constantinople fork. And, not with the next major update – Serenity, as planned.
Till now, developers of Ethereum did not name the date of the deployment of the Constantinople update. However, according to the roadmap of the Metropolis hard fork, this should happen at the end of this year or early next year. The first stage of the Metropolis – Byzantium – was successfully held on 16 October. Constantinople is the second phase of the Ethereum network large-scale update.
Let’s remember, the blockchain platform Ethereum currently runs on Proof of Work (PoW) consensus. As a result, a lot of hardware and electricity goes into transaction confirmation. The process that we call “mining”. That is searching for the next block on the chain (therefore, “blockchain”). So, what will be the importance of Ethereum’s Casper update for the future of blockchain?
Importance of Ethereum’s Casper update
Casper will cardinally change Ethereum. This update translates the transaction verification from the consensus “Proof of Operation” (PoW) to “Proof of Stake” (PoS). In our opinion, POS systems are superior to POW systems. So, if one of the major players makes the change it will increase visibility for all POS coins. Most probably, this will make the ether price rise. The coins will be held as people stake and scarcity causes an increase in price.
There are also scaling issues. Currently, the Ethereum network can handle 10 to 20 transactions a second. That means the network can slump down quite easily. Especially, when an Initial Coin Offering (ICO) is going on. Implementing Casper will allow Ethereum network to resolve those scaling problems.
Currently, both Bitcoin and Ethereum networks use “proof of work” for transaction verification. That provides benefits to large players in the industry with extensive processing capacities. The move to consensus PoS will reduce the physical requirements for capacity. It will create a system that will withstand the centralization of mining. According to our estimates, about 80% of the world’s cryptocurrency is currently being mined in China mega-factories.
As for now, the final version of the Ethereum’s Casper update is not yet complete. Developers are still selecting the best solutions from two versions of the protocol. Also, people don’t realize that the first version of Casper is only an OVERLAY on top of the existing PoW mining infrastructure. How do we know this? Because Vitalik himself says so in his Casper paper. There is still a lot of work to be done on how the validator network will manage the protocols. However, one thing is indisputable — Casper is getting closer.