Casper is a project designed to implement PoS into the Ethereum network.
What Is Casper (Ethereum)?
The Proof-of-Work (PoW) consensus mechanism relies on computational processing power and is plagued by several shortcomings. The Proof of Stake (PoS) consensus algorithm, conversely, relies on token-holder deposits to achieve consensus.
What Is the Difference Between PoW and PoS?
Proof-of-Work (PoW) and Proof-of-Stake (PoS) are the most widely used consensus mechanisms.
In contrast, in Proof of Stake (PoS), instead of miners competing against each other, they are required to lock up some of their coins as stakes. A validator is chosen at random to validate the block depending on his stake weight (how many coins he has staked).
The Casper Protocol Will Be Implemented in Two Phases
The goal of Casper FFG is to eventually replace proof-of-work mining with proof-of-stake. This means that people who currently use hardware to mine Ethereum would be able to participate in validating and securing the network without having to buy expensive hardware.
Advantages That Casper Offers to Ethereum
Reduced Environmental Impact
Proof of Stake (PoS) systems don’t require as much effort to validate transactions, meaning miners don’t need high-powered hardware or spend as much on electricity. This means lower costs and less environmental impact — something that’s especially important now that Bitcoin mining consumes more energy than many countries.
Increased Scalability
Proof-of-Work requires every transaction to be validated by every node in the network before it can be completed. It uses a different validation method which would allow Casper to process more transactions per second, leading to faster and cheaper transactions overall.
Energy Efficiency
The big benefit of moving to proof-of-stake is that it will be more energy-efficient. In the long run, this will allow the amount of Ether in circulation to grow at a controlled and sustainable rate.
Casper protocol’s ultimate objective is transforming Ethereum to its version 2.0, which is also given the name of “Serenity.” Ethereum 2.0 aims to be faster, more efficient, and highly scalable.