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Ethereum’s Casper and Sharding New Design

Ethereum’s roadmap dictates it’s about to make a quantum leap in the evolution of blockchain. Vitalik Buterin indicated at a meeting of the platform’s open-source developers in mid June, 2018, that sharding and casper could be rolled out together.

These are in short, two of the most anticipated updates for Ethereum. Ethereum is in a race to reinvent the blockchain with the likes of NEO, EOS and others. Ethereum has a majority lead in worldwide developers, blockchain startups and an early headstart.

Ethereum May Release Casper and Sharding Together

Casper might be released on a sidechain, or shard, rather than as a smart contract, and this may be able to facilitate a simultaneous release. Casper refers to ethereum’s long-planned consensus algorithm proof-of-stake. It thus promises to be more energy efficient and egalitarian than its current proof-of-work system. Sharding in and of itself may be the next-gen solution to scaling the system to a massive number of transactions.

With the ability to process only up to 15 transactions per second (TPS), Ethereum needs to use Sharding and Plasma, to improve its tech to contemporary enterprise levels of transaction speed and scalability.

Sharding is a scaling solution that will use shards, a neat term for micro-chains to process separate types of transactions on the Ethereum blockchain. With a system of transaction classification on individual chains within Ethereum, a specific group of nodes would need to verify a relevant transaction, instead of all of them.

In a world where Visa processes things 50 times as fast as Bitcoin, Ethereum needs to show real world application viability.

We know that sharding is coming to Ethereum, but how Casper and Plasma altogether will improve Ethereum isn’t entirely clear.

If ‘proof of work’ (PoW)is too energy taxing at scale, proof of stake tech and implementation must be refined. Enabling Casper to go live without disturbing the ethereum blockchain itself is key and the simultaneous roll-out of the new design could enable Ethereum to work at orders of magnitude more efficiently.

The primary goal is massive scalability improvement, and 100 shards live could enable this. In short, the proof of stake beacon chain (aka full casper) will just be merged into the main chain. Casper is a “consensus by bet”, where proof of stake replaces proof of work, in that, the entire mining process goes virtual, and replaces miners with validators.

In 2018, PoW feels a bit outdated, with the usual criticisms that it is extremely energy-inefficient process because of the sheer amount of power and energy that it requires. Thus in many ways early blockchains replicate wealth inequality and ownership that certainly isn’t very decentralized.

PoS is more democratic just as Sharding requires exceptional randomness, validators get a reward proportionate to their bets. Since Ethereum developers always planned to eventually move on to proof of stake, Casper, basically just the PoS protocol that Ethereum has chosen to go with. Ethereum is on the bleeding edge of how to incentive a PoS system:

“The development process involves heavy exploration of both economic and game-theoretic considerations and Byzantine-fault-tolerant protocols, trying to create a protocol that satisfies one of several constraints simultaneously.”

If Sharding itself removes the need for the entire network of nodes to process every individual transaction — increasing TPS on the Ethereum blockchain; Casper is the friendly ghost that can punish all malicious elements.

Think of this way, I’ll just let Vlad speak to this key point:

So Casper is designed to work in a trustless system and be more Byzantine Fault Tolerant. If you care about decentralization, it must be enforced and implicit in the system you choose to use.

Casper is an amalgamation of two research projects of Ethereum devs. Now it looks like Ethereum will combine Sharding and Casper ‘upgrades’. This is significant for the history of blockchains. No system in the world is likely to provides 100% finality. Risks of hacks and security issues will increase exponentially as our blockchain, cloud and other architectures mature, offense is better than defense. It’s worth taking a look at Casper CBC, correct by construction. Easing the transition for Ethereum, from PoS to PoW is key; sharding and plasma does the rest.

In 2018, there’s reasonable confidence to assume with the huge developer community Ethereum has, it can evolve dynamically faster than new competitors arise. By 2022, we should basically know if Ethereum will be the dominant dApp platform or if valid competitors arise, it’s still after all, very early days.