{"id":10435,"date":"2023-01-11T12:34:16","date_gmt":"2023-01-11T12:34:16","guid":{"rendered":"https:\/\/www.bitnovo.com\/blog\/?p=10435"},"modified":"2022-05-17T07:41:43","modified_gmt":"2022-05-17T07:41:43","slug":"what-is-the-algorithm-casper","status":"publish","type":"post","link":"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-algorithm-casper","title":{"rendered":"What is the Casper algorithm?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Alternar tabla de contenidos\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-algorithm-casper\/#why_the_casper_algorithm\" >Why the Casper algorithm?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-algorithm-casper\/#how_does_caspers_proof_of_participation_algorithm_work\" >How does Casper\u2019s proof of participation algorithm work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-algorithm-casper\/#ffg_and_cbc\" >FFG and CBC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-algorithm-casper\/#ethereum_20_phases\" >Ethereum 2.0 Phases<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-algorithm-casper\/#advantages_and_disadvantages_of_casper\" >Advantages and disadvantages of Casper<\/a><\/li><\/ul><\/nav><\/div>\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span><p>When you read the name Casper, you may have automatically thought of the funny little ghost that goes by that name.<\/p>\n<p>However, Casper is also the title of a long-awaited update to the Ethereum network that will gradually shift the platform\u2019s consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS).<\/p>\n<p>So\u00a0<strong>what does this update entail, how will it work, how will it influence the Ethereum network?<\/strong>\u00a0In the following paragraphs we will describe\u00a0<strong>what Casper is and how it works.<\/strong><\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"col small-12 large-12\">\n<div class=\"col-inner\">\n<h2><span class=\"ez-toc-section\" id=\"why_the_casper_algorithm\"><\/span><strong>Why the Casper algorithm?\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/div>\n<\/div>\n<p>As we have anticipated, Casper is an update to the Ethereum Network, also called\u00a0<strong>Ethereum 2.0 or Serenity.<\/strong><\/p>\n<p>But, before explaining what this protocol consists of, it is necessary to analyze the main problems that\u00a0<strong>the current Ethereum network is facing<\/strong>\u00a0and that the Casper update tries to solve.<\/p>\n<p>Ethereum, like bitcoin and many other cryptocurrencies, uses a\u00a0<strong>proof of work<\/strong>\u00a0consensus mechanism. This is an algorithm in which network participants (miners) solve cryptographic puzzles to validate transactions, create new blocks and keep the network safe.<\/p>\n<p>Despite its popularity,\u00a0<strong>this consensus mechanism has some important limitations.<\/strong><\/p>\n<ul>\n<li><b>Scalability:\u00a0<\/b>the most important issue currently facing the Ethereum network is scalability. The Ethereum network supports hundreds of decentralized applications and needs to process a high number of transactions per second.<\/li>\n<\/ul>\n<p>The increased use of the Ethereum network, thanks to the creation of more Dapps and the execution of many transactions, has led to an increase in transaction time and cost. For the network to achieve mass adoption, efforts are needed to massively increase transaction speeds.<\/p>\n<ul>\n<li><b>Environmental sustainability:\u00a0<\/b>Another problem with PoW systems is that they require a large number of miners with very powerful computer equipment that gives them the possibility of earning rewards. This translates into considerable energy expenditure that could strongly affect environmental sustainability.<\/li>\n<li><b>Decentralization:\u00a0<\/b>Users who can access faster and more efficient mining equipment are more likely to validate transactions, create new blocks and earn rewards.<\/li>\n<\/ul>\n<p>This means that the mining of cryptocurrencies employing Proof of Work are usually concentrated among a few groups of miners who, in the case of Ethereum, account for 70% of the hash rate, going against the philosophy of decentralization that characterizes cryptocurrencies.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"col small-12 large-12\">\n<div class=\"col-inner\">\n<h2><span class=\"ez-toc-section\" id=\"how_does_caspers_proof_of_participation_algorithm_work\"><\/span>How does Casper\u2019s proof of participation algorithm work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div id=\"image_1717083150\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img fetchpriority=\"high\" decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu%C3%A9-es-el-algoritmo-casper.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper-300x205.jpg 300w\" alt=\"Qu\u00e9 es el algoritmo casper Bitnovo\" width=\"768\" height=\"526\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper-300x205.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>As we said in the previous paragraph, thanks to the Casper update, the Ethereum blockchain will switch to the Proof of Stake algorithm.<\/p>\n<p>Next we will see how Casper differs from other proof of participation protocols.<\/p>\n<p>First, in this type of algorithm\u00a0<strong>the miners will be replaced by validators.<\/strong><\/p>\n<p>Consensus will then be achieved through the vote of the validators. As in any PoS based algorithm, the vote of each validator will depend on the number of Ethers deposited, that is, on his participation.<\/p>\n<p><b>The mechanism works like this:<\/b><\/p>\n<ol>\n<li aria-level=\"1\">Validators wager a portion of their Ethers;<\/li>\n<li aria-level=\"1\">Then, they will start validating the blocks to be added to the chain;<\/li>\n<li aria-level=\"1\">Once they have added a block, they will receive a reward proportional to their bets.<\/li>\n<\/ol>\n<p>A very interesting feature of Casper, which differentiates it from most other POS protocols, is that it is designed to operate in an untrusted system and to be more tolerant to Byzantine failures.<\/p>\n<p>This means that<strong>\u00a0it uses a process by which malicious validators can be punished<\/strong>. That is, if a validator acts maliciously he\/she will be punished immediately and everything at stake will be reduced.<\/p>\n<p>The same happens if validators have very long idle times with their node. Carelessness or laziness will cause them to lose their bet.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"ffg_and_cbc\"><\/span>FFG and CBC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/div>\n<\/div>\n<div class=\"col small-12 large-12\">\n<div class=\"col-inner\">\n<p>To date, two implementations of Casper have been developed:<\/p>\n<ul>\n<li aria-level=\"1\"><b>Friendly Finality Gadget (FFG):\u00a0<\/b>it is led by Vitalik Buterin and is the first step in transitioning the Ethereum network from PoW to PoS, using a hybrid PoW\/PoS model. The goal is to create a smooth transition to PoS. The first version of the code was released in May 2018.<\/li>\n<li aria-level=\"1\"><b>Correct by Construction (CBC).\u00a0<\/b>CBC Casper is led by Vlad Zamfir and relies on a safety oracle to constantly adjust a partially constructed PoS protocol until the system is completed.<\/li>\n<\/ul>\n<p>Although the two versions were developed for Ethereum,\u00a0<strong>Casper<\/strong>\u00a0is a PoS model that\u00a0<strong>can be adopted and implemented in other blockchain networks.<\/strong><\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"ethereum_20_phases\"><\/span>Ethereum 2.0 Phases<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div id=\"row-1264133184\" class=\"row\">\n<div class=\"col small-12 large-12\">\n<div class=\"col-inner\">\n<div id=\"image_2077788272\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img decoding=\"async\" class=\"attachment-original size-original lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu%C3%A9-es-el-algoritmo-casper1.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper1.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper1-300x205.jpg 300w\" alt=\"Qu\u00e9 es el algoritmo casper Bitnovo\" width=\"768\" height=\"526\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper1.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper1-300x205.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/04\/Qu\u00e9-es-el-algoritmo-casper1.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>According to updated news, Ethereum 2.0 should be released in 3 phases, within 2022.<\/p>\n<ul>\n<li aria-level=\"1\"><b>Phase 0:\u00a0<\/b>In this first phase the Proof of Stake (PoS) mechanism of Ethereum 2.0 is up and running. Upgrading the network from PoW to PoS will make Ethereum scale and run faster and with less computing power .<\/li>\n<li aria-level=\"1\"><b>Phase 1:\u00a0<\/b>Aims to drastically improve scalability, with the introduction of fragmentation, which will allow the validation of parallel transactions for the first time.<\/li>\n<li aria-level=\"1\"><b>Phase 3:\u00a0<\/b>the third and final stage will see the launch of eWASM as the successor to EVM (Ethereum Virtual Machine).<\/li>\n<\/ul>\n<p><b>Last December we witnessed the official launch of the first phase of Ethereum 2.0\u00a0<\/b>(phase 0) with the\u00a0<b>Serenity\u00a0<\/b>upgrade that represented the first step towards better scalability and security. This upgrade will reduce congestion and high gas costs on the Ethereum network.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"advantages_and_disadvantages_of_casper\"><\/span>Advantages and disadvantages of Casper<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p><span data-text-color=\"primary\"><b>ADVANTAGES OF CASPER:<\/b><\/span>\u00a0As we advanced, the passage of Casper\u2019s Proof of Work to Proof of Stake consensus mechanism will solve problems related to\u00a0<strong>scalability<\/strong>, increasing the speed of transactions and ensuring the mass adoption of Ethereum;\u00a0<strong>environmental sustainability<\/strong>, since not needing powerful equipment will save energy costs and environmental pollution; decentralization, avoiding the problem of mining being concentrated in the hands of a few and going against\u00a0<strong>decentralization<\/strong>.<\/p>\n<p>Another big advantage of Casper is the<strong>\u00a0improved security level of the blockchain<\/strong>. With proof of participation it is difficult for a 51% attack to take place as, thanks to the validators\u2019 punishment mechanism, it would not be worth trying.<\/p>\n<p><span data-text-color=\"primary\"><b>DISADVANTAGES OF CASPER:<\/b><\/span>\u00a0At first Casper\u00a0<strong>does not promise true decentralization<\/strong>\u00a0as participation initially requires a minimum\u00a0<strong>deposit of 1,500 ETH<\/strong>, (approximately $3172.47). In addition wealthier validators are chosen more frequently, earning more rewards.<\/p>\n<p>This puts Ethereum\u2019s participation out of reach for the average user,\u00a0<strong>favoring the dominance of the so-called \u201cwhales\u201d<\/strong>. According to Vitalik Buterin the minimum requirement will be reduced to 32 ETH once Ethereum reaches 100% PoS after the CBC.<\/p>\n<p>With Casper, validators lock ETH into a smart contract for 3 to 12 months.<strong>\u00a0ETH price volatility will expose validators to significant illiquidity risk<\/strong>, disadvantaging their participation.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span>When you read the name Casper, you may have automatically thought of the funny little ghost that goes by that name. However, Casper is also the title of a long-awaited update to the Ethereum network that will gradually shift the platform\u2019s consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS). So\u00a0what does this update entail, how [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7956,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[185],"tags":[],"class_list":["post-10435","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-en"],"_links":{"self":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/comments?post=10435"}],"version-history":[{"count":0,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10435\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media\/7956"}],"wp:attachment":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media?parent=10435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/categories?post=10435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/tags?post=10435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}