Ethereum currently uses GPU-mining proof-of-work to perpetuate the blockchain, but I've read that the Ethereum foundation and developer team aims to move to proof-of-stake at some point in the future. What is the difference between the two and when will the switch be made?
When will Ethereum switch to Proof of Stake? [closed]
Right now, ethereum uses “proof of work” mining. This means miners use their graphics cards to essentially guess random numbers until somebody guesses the right number. Each guess is based on the past Ethereum transaction ledger and therefore represents a “vote” for what a miner believes is the “correct” chain. It is in miners’ economic self-interest to make guesses based on the “correct” chain because they won’t get rewarded (or rewarded as much) for guessing on the wrong chain. This is what keeps the ledger consensus intact.
The downside to PoW is the ridiculous energy usage it takes to keep all these graphics cards running 24/7. Proof of Stake (PoS) is a different type of mining based on ether holdings. Rather than graphic card hashpower representing a miner’s right to make guesses for the next block, their ether holdings do. No more graphics cards necessary.
A mechanism is built into the Ethereum protocol to make PoW (GPU) mining insanely difficult sometime in mid-2016, which will force miners to switch to Proof of Stake if they hope to stay competitive.
The main developer for the proposed proof-of-stake algorithm (CASPER) is Vlad Zamfir. Radio interview: https://www.reddit.com/r/ethereum/comments/3t2cph/vlad_zamfir_bringing_ethereum_towards/ Slide deck from DEVCON day 1: https://docs.google.com/presentation/d/1bV_vXJBko-DmhAgnOFYg8ZNbAvCZCZrlf0KBFPqwVIw (The DEVCON day 1 video was removed by Youtube for some reason.)
EDIT: Ethereum entered the Homestead phase on 3/14/2016 and there's still Metropolis to go before Serenity, which is supposed to be the PoS "final" phase, so PoS in mid-2016 seems unrealistic. Here's the phases announcement from a year ago. My summary TL;DR summary is in the comments.
https://www.reddit.com/r/ethereum/comments/2xsin2/the_ethereum_launch_process_vinay_gupta/
Ether should switch to DPOS: bitshares.org/technology/delegated-proof-of-stake-consensus –
Boxwood
According to Vitalik Buterin on r/ethereum, the difficulty bomb, which will make PoW mining impossible at some point, was slowed down with the homestead hardfork a bit.
As it turns out, with the change in the difficulty adjustment algorithm brought about in the last hardfork, the ice age will come very slowly indeed. Originally, the maximum amount by which the difficulty could adjust was 1/2048x, and so given a natural mining difficulty of ~2**45 (where it is now), after around block 3500000, it would go up faster than it goes down, and the protocol would quickly freeze. Now, difficulty can adjust down faster than that if the block time is slow enough, and so even after this point there is an equilibrium. At block 3.5m (1 year from now), we would have an equilibrium block time of 25s for 100k blocks (~1 month); then we would see 35s for 100k more blocks (now ~1.4 months); then ~55s for ~2.2 months, then ~95s for ~3.8 months, and so forth until we get ~655s for ~26 months (ie. slightly worse than bitcoin), and only after that does the protocol break because of the cap of ~99/2048 downward adjustment, and that final doom does not take place until 2021 (though it certainly gets very annoying by the second half of 2017).
TL;DR Blocktime will be annoying in second half of 2017 and the final doom happens somewhere in 2021. I expect the switch to proof of work not before Q3/2017.
Hi, any further news on the next upgrade? And what will happen then when so many miners will need to find other coins to mine? –
Gunfire
Check this thread on reddit. The Casper testnet is live already. –
Benue
it's not live according to that thread. Seems the update will not be implemented for at least 6 months –
Gunfire
It's "live" on testnet. So it's not live, but it lives :) –
Benue
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